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Highsmith Rental Company purchased an apartment building early in 2021. There are 25 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available:
Residual Value Service Life (in Years)
Appliance Cost Stoves $47,000 $2,000 6
Refrigerators 42,000 8,000 5
Dishwashers 40,000 7,000 4

Sagot :

tutorconsortium650

$30,00 as a whole Depreciation Base Total = $28,500 Total Straight Line Depreciation: $5,675 Group Dep Rate is equal to 5,675/33,000, or 17.20. Group Life equals 28,500 / 5,675.

Depreciation? What do you mean?

The accounting technique of spreading out the cost of the a tangible asset over it's own useful life is known as depreciation. The amount of depreciation shows how much of the asset's worth has been utilized. By purchasing assets over a predetermined length of time, it enables businesses to generate income from of the assets they own.

What makes depreciation an asset?

Accumulated depreciation should be categorized as an asset rather than a liability if you must choose, simply because that is how the account is shown on the balance sheet.

to know more about depreciation visit:

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