Equipment with an estimated life of 10 years and no expected residual value was purchased on account
Question:
Equipment with an estimated life of 10 years and no expected residual value was purchased on account for $60,000 on March 6, 2023. Assuming a year-end of December 31, calculate depreciation for 2023 and 2024 using the straight-line method:
1. To the nearest whole month
2. Using the half-year convention
Step by Step Answer:
a b 2023 5000 3000 202...View the full answer
Fundamental Accounting Principles Volume 2
ISBN: 9781260881332
17th Canadian Edition
Authors: Kermit D. Larson, Heidi Dieckmann, John Harris
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
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