Depreciation

Essay specific features

 

Issue:

Business

 

Written by:

James B

 

Date added:

July 24, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 579

 

Was viewed:

1654 times

 

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Essay content:

The method a company chooses to incorporate should be one that most effectively matches expenses with the revenues produced. The method that most select is that of straight-line depreciation, which "spreads the depreciable value evenly over the useful life of an asset." (Horngren, Sundem, Elliott, & Philbrick 2006, p...
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In order to calculate depreciation expense we take the cost of the acquisition minus the estimated residual value divided by the years of estimated useful life. The depreciation schedule using the straight-line method for Balls and Bats, Inc. would be as follows: Total Acquisition cost= $100,000 Salvage value= $10,000 Estimated useful life= 4 years Depreciation expense= 100,000 - 10,000 = 22,500 4 D= $22,500 per year Single-line Depreciation Balances at End of Year 1 2 3 4 Acquisition cost of Equipment $ 100,000 $100,000 $100,000 $100,000 Accumulated Depreciation $ 22,500 $ 45,000 $ 67,500 $ 90,000 Net book value $ 77,500 $ 55,000 $ 32,500 $ 10,000 ? Balance at the end of year 4 equals salvage value of $10,000 Assets that shows a pattern of depreciation that is written off more quickly than regular straight-line method is referred to as accelerated depreciation...
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