Commerce Exam  >  Commerce Questions  >  Machine was purchased for 50000 installation ... Start Learning for Free
Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation?
Most Upvoted Answer
Machine was purchased for 50000 installation expenses amounted to 2000...
Depreciation Calculation for a Machine

Initial Cost of Machine
- Machine purchase cost: $50,000
- Installation expenses: $2,000
- Wages paid on installation: $4,000
- Total cost: $56,000

Estimated Scrap Value
- Scrap value at the end of useful life: $6,000

Depreciable Amount
- Depreciable amount = Initial cost - Scrap value
- Depreciable amount = $56,000 - $6,000
- Depreciable amount = $50,000

Depreciation per year
- Straight-line depreciation method: Annual depreciation = Depreciable amount / Useful life
- Annual depreciation = $50,000 / 10 years
- Annual depreciation = $5,000

Repairs
- Repairs made after 6 months from purchase date: $6,000
- Repairs are not capitalized and do not affect the depreciable amount or useful life.

Journal Entries
- At the end of each year, record the depreciation expense:
- Depreciation Expense account: $5,000
- Accumulated Depreciation account: $5,000

Note: Depreciation is a non-cash expense that reflects the wear and tear of an asset over its useful life. The straight-line method assumes that the asset depreciates evenly over its useful life. Repairs and maintenance costs are not capitalized and do not affect the depreciable amount or useful life.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
Explore Courses for Commerce exam

Similar Commerce Doubts

Top Courses for Commerce

Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation?
Question Description
Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation?.
Solutions for Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? defined & explained in the simplest way possible. Besides giving the explanation of Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation?, a detailed solution for Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? has been provided alongside types of Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? theory, EduRev gives you an ample number of questions to practice Machine was purchased for 50000 installation expenses amounted to 2000 and wages wages of 4000 was paid on installation. The scrap value at the end of its useful life of 10years is 6000. Repairs of 6000 was made after 6 months from the purchase date. Calculate the depreciation? tests, examples and also practice Commerce tests.
Explore Courses for Commerce exam

Top Courses for Commerce

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev