Spiral Company uses the sun-of-the years’ digits method to depreciate equipment purchased in January 2021 for P20,000. The estimated residual value of the equipment is P2,000 and the estimated useful life is 4 years. What should Spiral Company report as the asset’s carrying amount as of December 31, 2023? a. 1,800 b. 2,000 c. 4,500 d. 3,800
Spiral Company uses the sun-of-the years’ digits method to depreciate equipment purchased in January 2021 for P20,000. The estimated residual value of the equipment is P2,000 and the estimated useful life is 4 years. What should Spiral Company report as the asset’s carrying amount as of December 31, 2023? a. 1,800 b. 2,000 c. 4,500 d. 3,800
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 2E: Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The...
Related questions
Concept explainers
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.
Topic Video
Question
Spiral Company uses the sun-of-the years’ digits method to depreciate equipment purchased in January 2021 for P20,000. The estimated residual value of the equipment is P2,000 and the estimated useful life is 4 years. What should Spiral Company report as the asset’s carrying amount as of December 31, 2023?
a. 1,800
b. 2,000
c. 4,500
d. 3,800
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning