Standard Company purchased a machine on January 1, 2009 for P500,000. At the time, it was determined that the machine had an estimated useful life of 10 years and an estimated residual value of P20,000. balance method of depreciation. During 2013, the company decided to change its depreciation method to straight line, at which time, the machine's remaining uscful life was estimated to be 5 years, including the current year, with a residual value at the end of useful life of P10,000. The company used the double-declining REQUIRED: What is the depreciation èxpense for the machine for the year 2013?
Standard Company purchased a machine on January 1, 2009 for P500,000. At the time, it was determined that the machine had an estimated useful life of 10 years and an estimated residual value of P20,000. balance method of depreciation. During 2013, the company decided to change its depreciation method to straight line, at which time, the machine's remaining uscful life was estimated to be 5 years, including the current year, with a residual value at the end of useful life of P10,000. The company used the double-declining REQUIRED: What is the depreciation èxpense for the machine for the year 2013?
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 8P: Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of...
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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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