Record any entries required on April 1, 2018.
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.
Rogers Co. had a sheet metal cutter that cost $240,000 on January 1, 2013. This old cutter had an estimated life of ten years and a salvage value of $40,000. On April 1, 2018, the old cutter is exchanged for a new cutter with a fair value of $120,000. Rogers also received $30,000 cash. Assume that the last fiscal period ended on December 31, 2017, and that straight-line
Instruction: Record any entries required on April 1, 2018.
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