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What is the accumulated depreciation that is offset against the fixed asset account?
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∙ 10y ago
If a piece of machinery (a fixed asset) costs $100,000, and the machine has an expected useful life of ten years, then, using the straight-line depreciation method, the machine depreciates at a rate of $10,000 a year. (100,000 divided by 10 is 10,000)
At the end of the first year, the fixed asset account will show the original cost, but the depreciation account will show $10,000. To know the net value of the asset, the original cost of $100,000 is offset by the $10,000 depreciation, giving a net asset value of $90,000 dollars.
At the end of the second year, the fixed asset account will still show the original cost, but the depreciation account will now show $20,000, being the accumulated total of (a) the first year's depreciation, and (b) the second year's depreciation. As the net value of the fixed asset is calculated by deducting the accumulated depreciation from the original cost, the net value will now be $80,000. i.e. $100,00 minus (offset by) the $20,000 accumulated depreciation.
As the machine gets older it will be worth less. It's decreasing value, and its decreased value at any point is accounted for by deducting accumulated depreciation to date from the original cost of the fixed asset.
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∙ 10y ago
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Is Accumulated depreciation account is an expense account?
No. Accumulated Depreciation is a contra-account which appears on the asset side of the Balance Sheet. It is a credit balance account which reduces the value of Fixed Assets to reflect their declining value due to age and use. The normal offset to an entry to the Accumulated Depreciation account is a debit to Depreciation Expense.
What type of account is accumulated depreciation and how is it reported in the financial statements?
Accumulated depreciation is a contra-asset account and show in the asset section of the Balance Sheet. It is called contra-asset account because contrary to any asset account Acc. Dep. is a credit type of account. The offset of Accumulated depreciation is to Debit the expense account Depreciation.
What is the definition of offset accounting?
One that reduces the gross amount of another account to derive a net balance. Accumulated depreciation, which is a contra account to fixed assets to obtain book value, is an example of an offset account. Discount on note payable, which is a reduction of notes payable to derive the carrying value, is another example.
An account which is offset against another account is?
contra
What is meant by offset in medical billing?
I Recently Received Court Document From Arbitration Demanding an offset from A Medical Insurance payment for an accident’ Is This legal or withstanding? As the plain tiff why is this necessary? Very confused!
Machinery sold what is the accumulated depreciation?
All equipment owned by a business should be listed on the corporation's income tax return each year. This page of the report is called the Depreciation Schedule. Each year the taxpayer should report any new equipment purchased and also tell his accountant which items of equipment were sold or disposed of by the owner. The corporation's accountant increases the depreciation each year to offset income and thereby reduce taxes. The depreciation amount taken each year is usually higher than the actual physical depreciation occurring due to weather and use. To determine the accumulated depreciation on a piece of equipment, look at the last tax return available to see what the number is on the Depreciation Schedule. The actual value of the equipment sold will be higher than the Purchase Price New minus the Accumulated Depreciation. A good rule of thumb would be to add back 1/2 of the accumulated depreciation to get a ball-park idea of the fair market value. Better yet - have the equipment appraised by a Certified Machinery & Equipment Appraiser (CMEA). For more information on this subject, go to www.nebbinstitute.org. An interesting and helpful article on farm equipment that discusses depreciation, recaptured depreciation and capital gains tax related to the sale of equipment can be found at www.extension.iastate.edu/Publications/PM1450.pdf. Paul Klinge, CBI, CBC, CSBA The Lincoln Group, Inc. Waverly, Iowa 319-352-0132 Business Transfer Specialists Mergers & Acquisitions Business Valuations Machinery & Equipment Appraisals
What is the synonym for offset?
balance, compensate, account (for)
What does tangible net worth means?
Net worth means the cost (amount paid at the purchase date plus any capitalized costs like major improvements) offset by the accumulated depreciation/amortization. For example, you purchase a building for $1m and made a major improvements of 500k. The cost of the tangible asset is on the balance sheet for 1.5m. Then as time goes by you will depreciate the building based on its expected life. Let's say the building has a ten year life then you will depreciate 150k every year. Two years from the purchase/improvement date, you have the cost of $1.5m and the accumulated depreciation of $300k. the net worth of the building is $1.2m
What is the journal entry to offset cost of issuing common stock legal fees against the common equity account?
debit share capital accountcredit legal fee expenses
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Can you use capital loss to offset dividend income?
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How many days must account be delinquent salary offset?
90 days
