On September 30, 2018, Bricker Enterprises purchased a machine for OMR 11,000. The estimated service life is 7 years with OMR 1,000 residual value. Bricker records partial-year depreciation based on the number of months in service. Using the sum-of-the-years'-digits method, depreciation for 2018 would be: Select one: A. 917 B. 833 C. 500 D. 3,167
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.
On September 30, 2018, Bricker Enterprises purchased a machine for OMR 11,000. The estimated service life is 7 years with OMR 1,000 residual value. Bricker records partial-year
Using the sum-of-the-years'-digits method, depreciation for 2018 would be:
917
833
500
3,167
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
