What is the "Depreciation Expense" and "Accumulated Depreciation" for 2020 and 2021 under the straight-line method?
What is the "Depreciation Expense" and "Accumulated Depreciation" for 2020 and 2021 under the straight-line method?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.5E: Change in Estimate Assume that Bloomer Company purchased a new machine on January 1, 2016, for...
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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.
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Transcribed Image Text:Question 26
Use the following information for items 26, 27 and 28.
Golden Rams Company acquired equipment on January 1, 2020 for $43,500. The
equipment has an estimated useful life of 10 years or 385,000 unit of product with a
salvage value of $5,000. During 2020 the equipment produced 25,000 units and
during 2021 the equipment produced 32.500 units.
What is the "Depreciation Expense" and "Accumulated Depreciation for 2020 and
2021 under the straight-line method?
2020 Depreciation Expense, $4,350: Accumulated Depreciation, $4,350
2021-Depreciation Expense. $4,350;
Accumulated Depreciation. $4.350
2020- Depreciation Expense, $4.350:
2021-Depreciation Expense: $4,350:
2020--Depreciation Expense, $3,850;
2021--Depreciation Expense, $3,850:
2020--Depreciation Expense. $3,850.
2021--Depreciation Expense. $3,850,
Accumulated Depreciation, $4,350
Accumulated Depreciation, $8,700
Accumulated Depreciation, $3,850
Accumulated Depreciation, $3,850
Accumulated Depreciation. $3,850
Accumulated Depreciation, $7.700
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