Machine account and provision for depreciation account balance straight line method?

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Machine account and provision for depreciation account balance straigh...

The balance in the machine account and provision for depreciation account will depend on the specific details of the transactions that have been recorded in the accounts.

The machine account is an asset account that is used to record the cost of a machine or other long-term asset that is used in a business. It is typically debited when the asset is purchased and credited when the asset is sold or otherwise disposed of.

The provision for depreciation account is a liability account that is used to record the expected depreciation expense for a machine or other long-term asset. Depreciation is a method of allocating the cost of an asset over its useful life, and the provision for depreciation account is used to record the estimated amount of depreciation expense that will be incurred in future periods.

If the company is using the straight-line method of depreciation, the annual depreciation expense will be calculated by dividing the cost of the asset (less its residual value) by its useful life. The balance in the provision for depreciation account will increase by the amount of the annual depreciation expense each year.

For example, if a machine was purchased for 100000 and has a useful life of 10 years and a residual value of 0, the annual depreciation expense using the straight-line method would be calculated as follows:

Annual depreciation expense = (cost - residual value) / useful life

= (100000 - 0) / 10

= 10000

If the company records the annual depreciation expense in the provision for depreciation account, the balance in the account will increase by 10000 each year. At the end of the first year, the balance in the provision for depreciation account would be 10000, and at the end of the second year it would be 20000, and so on.

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