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holly, incorporated has a building that originally cost $445,000. holly expects to be able to sell the facility for $107,000 at the end of its useful life. the balance of the related accumulated depreciation account is $204,000. the depreciable cost of the facility is:

Sagot :

Consequently, $338,000 is the facility's depreciable cost. The cost of an asset that can be depreciated over time is its depreciable cost.

What is accumulated depreciation?

A reduction in an asset's book value due to recognized life-to-date depreciation is referred to as accumulated depreciation. Alternatively, accelerated depreciation is a type of depreciation in which a greater amount of depreciation is recognized earlier in an asset's life. The amount of depreciation that has been taken into account as an expense on the income statement since the company acquired the asset until the balance sheet's date is represented on the balance sheet by the word "accumulated depreciation". The gross amount of the fixed asset is decreased by the accumulated depreciation, which is recorded in a counter asset account, which has a credit balance. Since it is not an asset or liability, it is not documented.

What kind of asset is accumulated depreciation?

Accumulated depreciation is the total amount of depreciation costs associated with a specific asset since the asset first came into use. It is a contra-asset account, meaning it has a negative balance that cancels out the balance in the asset account it usually goes with.

Briefing:

Depreciable Cost = Cost - Residual Value

Depreciable Cost = $445,000 - $107,000

Depreciable Cost = $338,000

Consequently, the facility's depreciable cost is $338,000. An asset's depreciable cost is its purchase price when it can be depreciated over time.

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