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 mustiness be replaced once the end of their profitable keep is r distributivelyed . on that point atomic number 18 several story orders that atomic number 18 used in to write off an asset s derogation make up over the period of its useful life . Because it is a non-cash expense , depreciation lowers the company s reported sugar while increasing slack cash flowAccountants have not been able to agree on a single , scoop system of depreciation because of meaningful differences among companies and the assets that thy own . As a result , several antithetic depreciation regularitys are usually used in financial statements . The different deprec iation methods are based on the same(p) concept to each one method allocates a pile of the cost of a depreciable asset to each coming(prenominal) period in a systematic and rational mien . Nevertheless , each method allocates to each period a different portion of the cost to be depreciatedThe simplest and the most normally used method is straight- withdraw depreciation .

Under the straight-line method , an equal portion of the scholarship cost less the estimated correspondence value is allocated to each accounting period during the asset s estimated useful life some other method to calculate depreciation is sum-of-the-year s digits depreciation , which is an accelerated method of depr eciation based on an inverted scale of Anoth! er method of allocating 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 - vitamin D 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 stick out a full essay, rig it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay