Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company's operations in July appear below: Vulcan Flyovers Operating Data For the Month Ended July 31 Flights (9) Revenue ($345.009) Expenses: Wages and salaries ($3,700 + $89.009) Fuel ($34.009) Airport fees ($840 + $33.009) Aircraft depreciation ($9.009) Office expenses ($210+ $1.009) Total expense Net operating income. Actual Flexible Planning Results. Budget 56 Budget 54 56 $ 16,500 $19,320 $ 18,630 8,646 8,684 8,506 2,066 1,904 1,836 2,538 2,688 2,622 486 264 504 434 504 266 14,188 14,046 13,714 $ 2,312 $ 5,274 $ 4,916 The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.
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.
Please explain proper steps by Step and Do Not Give Solution In Image Format ? And Fast Answering Please ?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps