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How much would a car that cost 895400 new depreciate if its rate of depreciation was 20 percent during the first year?
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∙ 14y ago
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∙ 14y ago
Anonymous
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Think of a sentence with explanatory in?
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What should you do with new ideas during the drafting phase of writing?
During the drafting phase of writing, it's important to capture and incorporate new ideas that come to you. These ideas can enhance and enrich your text, so jot them down and figure out how they fit into your overall narrative or argument. It's best to keep an open mind and be flexible while incorporating new ideas during this phase.
Why was education of the masses became important during the Renaissance?
During the Renaissance, there was a growing interest in humanism and the idea of individual potential. Educating the masses was seen as a way to spread knowledge, cultivate critical thinking skills, and empower individuals to contribute to society in meaningful ways. This emphasis on education helped fuel advancements in art, science, and culture during this period.
Did Henry Ford receive education during teen years?
No, Henry Ford did not receive a formal education during his teenage years. He grew up on a farm and did not attend school regularly. He later learned mechanics and engineering through apprenticeships and self-study.
Why do assets depreciate in value?
the assets will loose their assets vavues because of wear and tear use of goods
Why should depreciation be treated as expense?
Depreciation is a portion of fixed asset charged to income statement due to wear and tear of assets during use in business in fiscal year that's why that wear and tear is accounted for by using depreciation.
Why you have depreciation?
Depreciation is used to allocate the fixed cost of asset to specific fiscal years during which that fixed asset is used to earn revenue if depreciation is not used then all cost is charged to one fiscal year which is against the matching concept.
What is depreciation cost?
Depreciation is that amount or part of full cost of fixed asset which is allocated to specific fiscal year during which any asset is used to generate revenue.
What is an cash loss?
the loss after depreciation incurred during the year is called as cash loss
How does depreciation expense on the income statement relate to accumulated depreciation on the balance sheet?
Depreciation expense on the income statement represents the portion of the asset's cost that is allocated as an expense during the reporting period. Accumulated depreciation on the balance sheet is a contra-asset account that reduces the asset's original cost by the total amount of depreciation expense recognized over its useful life. Thus, depreciation expense increases the accumulated depreciation balance on the balance sheet.
What are the effect of depreciation on profit and loss and balance sheet?
Depreciation is an expense. It should be charged under expense of a P&L Statement. Provision for Depreciation is the total depreciation of a particular fixed asset accumulated over the years. It should be deducted from the figure of the Fixed asset.
The cost of fixed assets recognized as being consumed during a fiscal period is recorded as?
depreciation expense
How do you depreciate rental property on taxes?
Depreciation is a benefit you must take or lose! You must take the "depreciation allowed or allowable....". Hence don't use it and you pay for it anyway!It is one of the biggest tax benefits of owing rental property, albeit you will need to appreciate there is a final adjustment where the amount you expense now (depreciate), reduces the basis and therefore increases the tax gain on sale...and the amount depreciated and expensed now (as high rate ordinary income) needs to be replaced and taxed at that same rate then. (I know, Whew!)It is done for both financial and tax reporting. Tax process and allowances are actually more generous than financial. However, while not truly complex...it takes some understanding.Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.Most types of tangible property (except, land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable.In order for a taxpayer to be allowed a depreciation deduction for a property, the property must meet all the following requirements:The taxpayer must own the property. Taxpayers may also depreciate any capital improvements for property the taxpayer leases.A taxpayer must use the property in business or in an income-producing activity. If a taxpayer uses a property for business and for personal purposes, the taxpayer can only deduct depreciation based only on the business use of that property.The property must have a determinable useful life of more than one year.Even if a taxpayer meets the preceding requirements for a property, a taxpayer cannot depreciate the following property:Property placed in service and disposed of in same year.Equipment used to build capital improvements. A taxpayer must add otherwise allowable depreciation on the equipment during the period of construction to the basis of the improvements.Certain term interests.Depreciation begins when a taxpayer places property in service for use in a trade or business or for the production of income. The property ceases to be depreciable when the taxpayer has fully recovered the property's cost or other basis or when the taxpayer retires it from service, whichever happens first.A taxpayer must identify several items to ensure the proper depreciation of a property, including:The depreciation method for the propertyThe class life of the assetWhether the property is "Listed Property"Whether the taxpayer elects to expense any portion of the assetWhether the taxpayer qualifies for any "bonus" first year depreciationThe depreciable basis of the propertyThe Modified Accelerated Cost Recovery System (MACRS) is the proper depreciation method for most property. Additional information about MACRS, and the other components of depreciation are in Publication 946, How to Depreciate Property.A taxpayer must use Form 4562, Depreciation and Amortization, to report depreciation on a tax return. Form 4562 is divided into six sections and the Instructions for Form 4562 contain information on how, and when to fill out each section.
What is the normal balance of depreciation expense accounts?
The answer to this question depends on the value of the depreciable assets the company has, the useful lives of the assets, and the depreciation methods used. When a firm owns many depreciable assets, depreciation expense will be higher. The longer the useful lives of the assets, the less the depreciation expense will be per period because the expense is being allocated over a longer period of time. The depreciation method also has a huge impact. If the straight-line method is used, then the expense will be constant each period. If another method such as double-declining balance is used, higher depreciation will occur during the beginning of the life of the asset. All of these factors affect the balance of the depreciation expense account.
Why use Sum-Of-Years-Digits Depreciation?
Sum of Years Digits places a higher depreciation value at the ront end of an asset letting you deduct that from your taxes early on. For a new company this is extremely useful because you save more on taxes during the first, most critical years. During the latter part of this process the depreciation amounts will be less which means you will pay more taxes. In the end the same amount is paid, so it all depends when you need the most money.
Is depreciation a source of fund?
Some people state that depreciation is a source of funds or a source of cash. I disagree. Depreciation expense is reported as a positive amount on the statement of cash flows prepared under the popular indirect method. However, the reason it is listed is to adjust the net income amount that had been reduced by depreciation expense on the income statement. (Recall that the depreciation entry debits Depreciation Expense and credits Accumulated Depreciation-the cash account is not involved.) In other words, the positive depreciation amount reported on the statement of cash flows is merely one of the adjustments needed to convert the accrual net income to the cash provided from operating activities. Depreciation is not a source of cash. Let's illustrate this with some amounts. A sidewalk florist operates a cash only business. During the most recent year, this florist had cash revenues of $100,000. Its expenses included $70,000 of cash expenses and $8,000 of depreciation expense on its truck that was purchased in an earlier year. During the year there were no other revenues or expenses, and the florist's cash balance increased by $30,000. The florist's income statement will report net income of $22,000 (revenues of $100,000 minus expenses of $78,000). The florist's statement of cash flows prepared under the indirect method will begin with net income of $22,000. It will then add the $8,000 of depreciation expense. The result is cash provided by operating activities of $30,000-which agrees to the business's change in its cash balance. The $8,000 of depreciation expense was not a source of cash, even though it appears as a positive amount on the statement of cash flows.
