Question

Nataro, Incorporated, has sales of $742,000, costs of $316,000, depreciation expense of $39,000, interest expense of $34,000, a tax rate of 21 percent, and paid out $125,000 in cash dividends. The common stock outstanding is 75,000 shares.

Answer 1

Depreciation is the cost of an asset that has been depreciated over a period of time and indicates how much of the asset has been used up during the year. Accumulated depreciation is the total depreciation expense assigned to an asset since it was used.

For example, Company A owns a vehicle with a useful life of $ 100,000 for five years. I would like to amortize at a double fixed rate. Depreciation for the first year is $ 40,000 ($ 100,000 * 2/5). The next year's depreciation is $ 24,000 (($ 100,000 – $ 40,000) * 2/5).

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