On January 1, 2019, TPS Company purchased for P4,800,000 a machine with a useful life of ten years and a residual value of P200,000. The machine was depreciated by the double declining balance and the carrying amount of the machine was P3,072,000 on December 31, 2020. The entity changed to the straight line method on January 1, 2021. The residual value did not change. What is the depreciation expense on this machine for 2021? A P359,000 B P384,000 P287,200 D P575,000
On January 1, 2019, TPS Company purchased for P4,800,000 a machine with a useful life of ten years and a residual value of P200,000. The machine was depreciated by the double declining balance and the carrying amount of the machine was P3,072,000 on December 31, 2020. The entity changed to the straight line method on January 1, 2021. The residual value did not change. What is the depreciation expense on this machine for 2021? A P359,000 B P384,000 P287,200 D P575,000
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 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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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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