Declining Balance Decreasing Method
In depreciation method, the decreasing amount of depreciation expense annually is derived from multiplication of depreciation rate by book value of the year beginning in the year in which it is charged.
Information :
A = Cost of assets is the amount of costs incurred by the company to acquire an activation until the asset is ready to be operated.
S = Estimated residual value of the asset is the value of the appraisal that may be obtained through the assets that have passed its life.
r = Depreciation rate or percentage depreciation
n = Age of benefit / Age of economic assets in the year.
D = Depreciation expense for each period
An asset at a cost of $ 20,000,000. After operating for 6 years is estimated the remaining value of $ 5,000,000. By using the declining balance method determine the rate of depreciation annually!
Answer:
A = $20,000,000
S = $5,000,000
n = 6 years
So the amount of depreciation each year is 20.63% of the book value.
Similarly this article.
Sorry if there is a wrong word.
The end of word wassalamualaikum wr. wb
Referensi :
The Formula of Declining Balance Decreasing Method
Information :
A = Cost of assets is the amount of costs incurred by the company to acquire an activation until the asset is ready to be operated.
S = Estimated residual value of the asset is the value of the appraisal that may be obtained through the assets that have passed its life.
r = Depreciation rate or percentage depreciation
n = Age of benefit / Age of economic assets in the year.
D = Depreciation expense for each period
Example Question of Declining Balance Decreasing Method
Answer:
A = $20,000,000
S = $5,000,000
n = 6 years
So the amount of depreciation each year is 20.63% of the book value.
Similarly this article.
Sorry if there is a wrong word.
The end of word wassalamualaikum wr. wb
Referensi :
- To'Ali's book math group accounting and sales
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