Robertson Company exchanged a machine for some land. The machine had cost $17,000, was 70% depreciated, and could be sold for $4,500. Robertson paid $950 in addition to giving up the machine. Assume instead that Roberstonson exhanged the machine fora new, more efficient machine with a fair value of $4,700 while still paying $950 as before. compute the amount at which the new machine shoudl be recoreded
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.
Robertson Company exchanged a machine for some land. The machine had cost $17,000, was 70%
Assume instead that Roberstonson exhanged the machine fora new, more efficient machine with a fair value of $4,700 while still paying $950 as before. compute the amount at which the new machine shoudl be recoreded
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
