Business, 05.07.2019 20:30 mariah10455

Acompany purchased new furniture at a cost of $14,000 on september 30. the furniture is estimated to have a useful life of 8 years and a salvage value of $2,000. the company uses the straight-line method of depreciation. how much depreciation expense will be recorded for the furniture for the first year ended december 31?

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Answer from: taetae83

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

Further explanation

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

Details

Class: College

Subject: Bussines

Keyword: Method of depreciating straight-line goods.

Answer from: Quest

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Answer from: Quest

How is this a question and how u need an answer for this

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Acompany purchased new furniture at a cost of $14,000 on september 30. the furniture is estimated to...

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