On 1 January 2010. A company purchased equipment for BD 230,000. The new machines have a useful life of five years, and the salvage value is estimated to be BD 30,000. The company has an estimation that the new machine can produce a total number of units 80,000. And expect to produce 20,000 units in its third year. Prepare the depreciation schedule for the machines using double decline method over the first 3 years from useful life.
On 1 January 2010. A company purchased equipment for BD 230,000. The new machines have a useful life of five years, and the salvage value is estimated to be BD 30,000. The company has an estimation that the new machine can produce a total number of units 80,000. And expect to produce 20,000 units in its third year. Prepare the depreciation schedule for the machines using double decline method over the first 3 years from useful life.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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On 1 January 2010. A company purchased equipment for BD 230,000. The new machines have a useful life of five years, and the salvage value is estimated to be BD 30,000. The company has an estimation that the new machine can produce a total number of units 80,000. And expect to produce 20,000 units in its third year. Prepare the depreciation schedule for the machines using double decline method over the first 3 years from useful life.
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