5. Prepare the journal entry to record year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of $42.000, an estimated life of 30.000 hours, $4,500 residual value and actual year 2 use of 8,000 hours. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
5. Prepare the journal entry to record year 2 units-of-production depreciation expense for Machine B, assuming a capitalized cost of $42.000, an estimated life of 30.000 hours, $4,500 residual value and actual year 2 use of 8,000 hours. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets
Section19.4: Disposing Of Plant Assets
Problem 1WT
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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