Using the following information create a Double declining, depreciation schedule. Computer Equipment: $3,000 Residual Value: $150 Useful Life: 5 years Example: Straight line depreciation Scheadule. year (beginning of year value) depreciation (end of year value) 1 $3,000 $570 $2,430 2 $2,430 $570 $1,860 3 $1,860 $570 $1,290 4 $1,290 $570 $720 5 $720 $570 $150
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.
Using the following information create a Double declining,
Computer Equipment: $3,000
Residual Value: $150
Useful Life: 5 years
Example: Straight line depreciation Scheadule.
|
year |
(beginning of year value) |
depreciation |
(end of year value) |
|
1 |
$3,000 |
$570 |
$2,430 |
|
2 |
$2,430 |
$570 |
$1,860 |
|
3 |
$1,860 |
$570 |
$1,290 |
|
4 |
$1,290 |
$570 |
$720 |
|
5 |
$720 |
$570 |
$150 |
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