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Mandalika has Published 473 Articles
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
83 Views
SolutionThe solution is given below −Cost = (175000 + 45000 – 0)/95000 = $ 2.32 per tonDepletion of mine = $ 2.32 * 60000 = $ 139200Depletion expenses = total depletion of mine – depletion (unsold) = 139200 – (2.32 * 15000) ... Read More
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Mandalika
213 Views
Depletion is a non-cash expenses which lowers the value of the asset periodically, through scheduled charges. Process of converting existing goods to new one is called production process. Depletion tells about how much quantity is produced in production process. Generally, depletion is used in timber, mining and oil and gas ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
132 Views
Processes 150 kgs of coffeeServed 1350 customersSolutionThe solution is given below −Cost of the machine = $ 75000Salvage value = $ 3000Depreciable value = cost of machine – salvage value = (75000 – 3000) = $ 72000Processes 150 Kgs of coffeeDepreciation = depreciable value * (number of units processed/total number of process units) = 72000 * (150/700) = $ 15428.57Served 1350 customersDepreciation = depreciation amount * (number of customers served/total number of customers) = 72000 * (1350/17500) = $ 5554.29
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
225 Views
Units of production method is a bit different from other methods of depreciation. This method is also called as units of activity and units of usage method of depreciation. In this method, depreciation is calculated based on number of units produced rather than useful life of an asset.In year, when ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
697 Views
SolutionThe solution is given below −Total cost = cost of machinery + transportation + installation => 1500000 + 175000 + 75000 => Rs. 1750000/-Depreciation rate = 12%Year endedOpening balanceDepreciation amountClosing balance31-03-20151750000210000154000031-03-20161540000184800135520031-03-20171355200162624119257631-03-20181192576143109.121049466.8831-03-20191049466.88125936.0256923530.854431-03-2020923530.8544110823.702528812707.1518731-03-2021812707.1518797524.858224715182.29364631-03-2022715182.29364685821.8752375629360.4184131-03-2023629360.4184175523.250209553837.16820131-03-2024553837.16820166460.4601841487376.7080231-03-2025487376.7080258485.204962428891.50305831-03-2026428891.50305851466.980367377424.52269CalculationsDepreciation amount = opening balance * depreciation rateClosing balance = opening balance – depreciation amountFor year 31-03-2015Depreciation amount = 1750000 ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
3K+ Views
In diminishing balance method, depreciation is calculated on book value of the asset at the start of the year instead of principle amount with fixed percentage. In this, the percentage is same but depreciation amount gradually decreases as it is done on book value.FormulaDepreciation amount = (book value * rate ... Read More
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Mandalika
83 Views
Cost of the equipment = Rs. 10, 00, 000 Salvage value = Rs. 75, 000 Useful life = 8 yearsSolutionThe solution is given below −Step 1 − Calculate depreciation rate using straight line method.Depreciation rate using straight line method = 1/useful life => 1/8 => 12.5%Step 2 − Multiple depreciation ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
180 Views
As the name suggest double declining, the asset is depreciated twice the rate than straight line method. It is also called accelerated depreciation. It does not mean depreciation is higher, it depreciates higher amount in initial years of asset and gradually depreciation expenses decrease in later years of the asset ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
306 Views
SolutionThe solution is given below −Cost of machine = Rs. 200000 Salvage value = Rs. 25000 Total life = 8 yearsFormulaStraight line depreciation = (ADE) / (CA –SV)Here ADE = Annual depreciation expenses, CA = Cost of the asset, SV = Salvage valueFirst method (using salvage value)Cost of the asset ... Read More
![Mandalika](https://www.tutorialspoint.com/assets/profiles/223769/profile/60_143952-1595686763.jpg)
Mandalika
200 Views
Straight line depreciation is the simple way to calculate depreciation. In this, a fixed amount is deducted from each accounting year of a firm. In straight line depreciation, firm depreciates equal amount from principle amount of an asset annually over its useful life. That means, every accounting year there will ... Read More