Business Math

Depreciation is a noncash expense that reduces the treasure of an asset as a result of wear and tear , age , or obsolescence . Most assets lose their value everyplace time and must be replaced once the end of their helpful sprightliness is r distributivelyed . on that point ar several story orders that atomic number 18 used in to write off an asset s disparagement make up over the period of its useful life . Because it is a non-cash expense , depreciation lowers the company s reported boodle while increasing slack cash flowAccountants have non been able to agree on a single , scoop out system of depreciation because of meaningful differences among companies and the assets that thy own . As a result , several antithetic depreciation methods are normally used in financial statements . The different depreciation met hods are based on the same(p) concept from each one method allocates a pile of the cost of a depreciable asset to each prox period in a systematic and rational behavior . Nevertheless , each method allocates to each period a different portion of the cost to be depreciatedThe simplest and the most usually used method is straight- withdraw depreciation .

Under the straight-line method , an equal portion of the scholarship cost less the estimated residual value is allocated to each accounting period during the asset s estimated useful lifeanother(prenominal) method to calculate depreciation is sum-of-the-year s digits depreciation , which is an accelerated method of depreciation based o n an inverted scale of Another method of all! ocating depreciable cost is double-declining dimension method . Under this method , twice the straight line rate is applied each year to the remaining not depreciated value of the assetStraight-line 9 ,450 - cholecalciferol 8 ,950 / 12 years 745 and 83 cents will be an annual depreciation expense for twelve yearsSum-of-the-year s digits 18 ,000 - 3 ,000 15 ,0001st year : 3 /6 50 of 15 ,000 7 ,5002nd year : 2 /6 33 .33 of 15 ,000 5 ,0003rd year : 1 /6 16 .67 of 15 ,000 2 ,500Double-declining balance methodResidual value is 300Year Comp .Depr . Exp .Acc . Depr .Book ValueAt acquisition 4 ,5001 4500 2 /3 3000 3000 15002 1500 2 /3 1000 4000 5003 500 2 /3 (333 .33 ) two hundred 4200 300Total 4 ,200...If you want to shake up a full essay, rig it on our website: OrderEssay.net

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