4. Find the appreciated/depreciated value for the situations given
P = 3000, T = 1 year, Decreasing rate = 4%
Answers
Answer:

How to Calculate Depreciation: Straight Line, Dimnishing Value Examples
What is Capital Expenditure?
Capital expenditure is when you purchase an asset. It might be a car, a house, a merry-go-round for your daughter, maybe even a submarine to use as your secret lab. Whatever it is, we label it as capital expenditure rather than an expense.
An easy way to think of it is, an expense is when you purchase something you use up in less than a year, whereas an asset is something that lasts for more than a year.
What is Depreciation?
Assets don’t last forever. When you buy a car for $5,000, it’s worth $5,000. But what about the next year? Because you drive it every day, leave the pizza in the back seat and draw smiley faces on the windows, the value goes down. Perhaps you can only sell it for $4,000 after a year. After three years, it might only be worth $1,500! This gradual reduction in value is called depreciation. We normally calculate depreciation on balance day, which is the last day of the financial year. For this reason, depreciation is known as a balance day adjustment.

Types of Depreciation
Straight Line Method
Diminishing value Method
In this Bookkeeping tutorial, you will learn-
The Straight Line Method
Depreciation Calculator
Diminishing value method
The Straight Line Method
Let’s look at an example:
Let’s say you decide to buy a secret underwater submarine lab. You purchase the most beautiful submarine you’ve ever seen for $100,000. However, you know that in 5 years of time, the submarine will only be worth $20,000.

The straight line method assumes that the asset will depreciate by the same amount each year until it reaches its residual value. The residual value is how much it will be worth at the end of its life. In this case, we know this amount is $20,000. That means the submarine is going to depreciate by $80,000 over five years.
Let’s work that out using some simple maths we learned back in elementary school.
$80,000 / 5 years = $16,000 per year
Now we have our answer. The submarine will depreciate by $16,000 every year for five years. After five years it will have depreciated in value by $80,000, leaving it with a residual value of $20,000.
Perfect. Let’s have a go using one of our bakery examples.
Remember the car we bought from John’s Car Shop? If I remember correctly, it was a green lotus, and it cost $3,000.

Now John tells us that in 5 years we’ll be able to sell that car for $1,000.
We now have all the information we need to work out for our car’s depreciation.
Value at time of purchase: $3,000
Value in 5 years time: $1,000
Amount to be depreciated (HINT: Initial value minus residual value): $2,000
Depreciation per year: $400
Depreciation Calculator
Enter value at time of purchase:
Great, so we now know that we will be depreciating our car at $400 per year. Now although there is no cash involved, these are still transactions. That means they have a journal entry and need to be entered into a ledger!
Depreciation is an EXPENSE. Therefore, we are going to create a depreciation expense account, which is a debit account.
Accumulated depreciation is a term we haven’t come across yet. Accumulated depreciation, as the name suggests, is the total amount of depreciation that has built up over the years. For example, if our asset depreciates by $100 for each