On August 1, 2019, Jefferson Consulting purchased new computers for $15,920. The computers are expected to last 3 years and will have an estimated residual value of $800. Jefferson Consulting has a December 31 year end. Required Prepare the table below showing the yearly depreciation, accumulated depreciation, and net book value of the equipment.
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.
On August 1, 2019, Jefferson Consulting purchased new computers for $15,920. The computers are expected to last 3 years and will have an estimated residual value of $800. Jefferson Consulting has a December 31 year end.
Required
Prepare the table below showing the yearly
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