This week is about
depreciation schedule. Depreciation schedule is a document usually used by
companies to report their financial statement. They contain information on the
type of assets the company is depreciating.
Depreciation
Schedule aims to:
1.
relate the total and average years in depreciation in the preparation of
depreciation schedule; and
2.
construct the depreciation schedule.
Depreciation is the lost in value of physical assets
through its use. The yearly deposits into the depreciation fund are called depreciation charges. The depreciation fund is the portions of a
given amount at the end of its useful life or the difference between the
original cost of the asset and the sum in the depreciation fund is called the book value of the asset. At the end of
the year.
The formula in making depreciation schedule is cost – scrap value = depreciation/number of
hours
Here’s how you make a
depreciation schedule :
Machine cost 20,000
Scrap 4000
Hours 40, 000
Subtract the cost (P20,000) with the scrap value of (P4000)
and the answer is P 16,000. Divide the total 16,000 to the number of hours (P40,000)
and you will get P0.40hr. in the chart you will put in the years category year
0-4. Why year 0-4? Because in the problem they are asking for 4 years of
depreciation schedule. Put the hours in hours in operation which is already given. In depreciation charge multiply the hours in operation
with the charge per operating hour which is 0.4hr. In amount depreciation fund
you will add the amount depreciation in depreciation charge. To get the book value at end of year subtract it
from depreciation charge. For example:
Book value at end of year depreciation charge
20,000 - 4,000 and you will get
16,000 -
3,600
12,400 - 4,800
7,600 - 4,000
That’s how you make a depreciation charges.
Checked by: Prof. Criscencio Paner
more info. http://panercris.sulit.com.ph/
