PT Silver King uses a revaluation model for one class of equipment it uses for its gold cane production business. This tool was purchased on January 2, 2021 for $500,000 and has a useful life of 10 years with no salvage value. PT Silver King has the following information related to this instrument (assuming that the useful life and salvage value of the instrument does not change during the period of information presented below). Dates Fair Value $500,000 2 January 2021 31 December 2021 $468,000 31 December 2022 $380,000 31 December 2023 $355,000 Instructions: a. Prepare the required entries on December 31, 2021, 2022, and 2023 if the company uses: 1. Cost model; and 2. Revaluation model
PT Silver King uses a revaluation model for one class of equipment it uses for its gold cane production business. This tool was purchased on January 2, 2021 for $500,000 and has a useful life of 10 years with no salvage value. PT Silver King has the following information related to this instrument (assuming that the useful life and salvage value of the instrument does not change during the period of information presented below). Dates Fair Value $500,000 2 January 2021 31 December 2021 $468,000 31 December 2022 $380,000 31 December 2023 $355,000 Instructions: a. Prepare the required entries on December 31, 2021, 2022, and 2023 if the company uses: 1. Cost model; and 2. Revaluation model
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter9: Depreciation (deprec)
Section: Chapter Questions
Problem 1R: Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an...
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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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