The Trial Balance TBA Limited contained the following accounts (alphabetically) at December 31, 2020, the end of company's fiscal year. Accounts . . Balances ($) .... || .... Accounts . Balances ($) ..... . ........... Accumulated Depreciation-Building . 127000 . Accumulated Depreciation-Equipment. 35000. Additional Paid in Capital-Common Stock. 229000 .... II . Loss on Sale of Property . . 7310 ... .. . .... Merchandise Inventory . . Mortgage Loan II - 227000 .... ... 104000 ..... . . . .. .... Auditors Fee. 204000. Rent Revenue . 53000 . . . . .... .... ................... ....... Buildings. - I| . Retained Earnings . 401000. 51400 ....... . ............. ..... .... ........ ...... Cash . Salaries and Wages Expense II - . Sales . 199660. 104000 . . .... ..... ............. .... .... - II II .... Sales Returns and Allowances Supplies. Common Stock ($2 each)... 119000. 1755000 ....... ... . .... .... ... .. .... Cost of Goods Sold . 1094000 . 9030 . ..... .... ... ... Equipment . 201000.. 6400 ........ . . ..... . ... ... ... . ... Interest Expense . 20000.... |I ...... . . .... .... ..... .. ..... Additional Data: 1. On December 31, 2020, Supplies on hand totaled $2400 2. Buildings are being depreciated @10 % under straight line method, Equipment is being depreciated @20% under declining balance method. 3. The company is under 20% tax bracket. 4. The company has declared $0.30000000000000004 dividend per share. 5. Physical check on December 31, 2020 reveals that inventory actually on hand is $225000. Prepare the followings: (a) Multistep income statement; (b) Stockholder_s Equity Statement (c) Classified Balance Sheet as at December 31, 2020

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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.