what will the recorded depreciation for the current year be? $1,250. $1,667. $2,500. $5,000.
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.
Sullly Company purchases a $10,000 asset with a 4-year life with no expected residual value on September 5 of the current year. Using the half-year convention and the double-declining-balance method, what will the recorded
- $1,250.
- $1,667.
- $2,500.
- $5,000.
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