The La Salle Bus Company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a BV of $10,000 at the time of the trade in. The new bus will be kept for 10 years before being sold. Its estimated SV at that time is expected to be $5,000. Find out all different parameters of SL depreciations.
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.
The La Salle Bus Company has decided to purchase a new bus for $85,000 with a trade-in of their old bus. The old bus has a BV of $10,000 at the time of the trade in. The new bus will be kept for 10 years before being sold. Its estimated SV at that time is expected to be $5,000. Find out all different parameters of SL
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