sted a depreciation schedule of straight-line and double- declining-balance depreciation methods. The fiscal year-end of ESC is 31 December. 2 Prepare a depreciation schedule for the warehouse using the double- declining-balance method showing the calculation of depreciation expense, accumulated depreciation, and asset book value. Round your numbers to the nearest integer. 3 Explain w
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.
On 1 May 20X2, Express Shipping Company (‘ESC’) paid $21,208,600 for land and a warehouse built on it. An appraisal indicated that the land’s fair value was $15,149,000 and the warehouse’s fair value was $11,361,750. ESC estimated that the warehouse can be used for 6 years and will have a salvage value of $250,500. In trying to decide which
has requested a depreciation schedule of straight-line and double- declining-balance depreciation methods. The fiscal year-end of ESC is 31 December.
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2 Prepare a depreciation schedule for the warehouse using the double- declining-balance method showing the calculation of depreciation expense,
accumulated depreciation , and asset book value. Round your numbers to the nearest integer. -
3 Explain why the units-of-production method is not suitable for recording the depreciation of the warehouse.
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