Depression on machinery 2008
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Subtract the asset's salvage value from its cost to determine the amount that can be depreciated. Divide this amount by the number of years in the asset's useful lifespan. Divide by 12 to tell you the monthly depreciation for the asset.
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answer: If depreciation is charged on machinery, it involves 2 aspects. The first aspect is depreciation is an expense (depreciation is a reduction in the value of any fixed asset due to use or passage of time, just like the value of a car reduces after use). So to record depreciation we must reduce 500 from the capital. The second aspect is that value of machinery is to be reduced, hence 500 will be reduced from machinery also.
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