Depreciation expense for the first year of the rebate is calculated by the following calculation:
Depreciation expense = acquisition cost of fixed assets - residual value: economic life of fixed assets
Is known :
Cost of fixed assets = $ 14,000
Residual value = 8
Economic age = $ 2,000
Settlement:
Depreciation expense = 3 / 12x [($ 14,000 - $ 2,000): 8 years]
Depreciation expense = $ 375
So the depreciation expense for the first year is $ 375
Note: "Where is the value from 3/12? So in 1 year, there are 12 months, and the furniture began to be used at the end of September. So during the first years, the machine was used in the months: October - November - December. So in the first year, the furniture is used for 3 Months, then depreciation for 3 Months: 7/12
<h2>Further explanation
</h2>
Depreciation or depreciation is an accounting term that is defined as a decrease in the value of a fixed asset due to time and use. Fixed assets that experienced depreciation include machinery, whether office equipment in the form of computers, printers, and calculating machines or mining machinery or factories, vehicles, furniture, and buildings.
As you already know, the depreciation method consists of several methods, including:
- Straight-line Shrinkage Method
- Double Decreased Depreciation Method
- Depreciation Method Number of Year Figures
- Depreciation Unit Work Hours Method
- Depreciation Method of Production Unit
But in this discussion, we will discuss the Straight Line Method. Below is the explanation.
Straight Line Method
This straight-line method assumes that fixed assets will contribute evenly throughout their use. So that fixed assets will experience the same level of decline in function from period to another period until the fixed assets are not reused in the company's operational activities.
The fixed assets depreciation formula is a straight-line method:
Depreciation = acquisition cost of fixed assets - residual value: economic life of fixed assets
Can also use a percentage:
Depreciation = Percentage of depreciation x acquisition cost - Residual value/Economic life of fixed assets
Learn more
Straight-line method brainly.com/question/14208414, brainly.com/question/6982430
Details
Class: College
Subject: Bussines
Keyword: Method of depreciating straight-line goods.