Help! Depreciation

Australia Discussion in 'Exams and Studying' started by jazz195, Dec 14, 2017.

  1. jazz195


    Dec 14, 2017
    Likes Received:
    Hi everyone I am doing exercises for financial accounting and I am stuck with depreciation.

    Depreciation for the office equipment is calculated using the units of production method; the total number of usage hours for the office equipment over its useful life is 5,000 hours.

    During the month thr office equipment was used for 210.

    The formula I am using is
    Depreciable amount / operating hours

    I am not sure which amount use for depreciable amount.
    In the statement of financial position I have office equipment at cost: 8,338

    Minus accumulated depreciation: 3,335
    = 5,003

    Mi question is: for depreciable amount should I use the office equipment at cost (8,338) or the value attained from subtracting office equipment at cost - accumulated depreciation (5,003)?

    Thank you guys!
    jazz195, Dec 14, 2017
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  2. jazz195

    bklynboy VIP Member

    Oct 12, 2011
    Likes Received:
    You depreciate the cost of the asset - not the net amount after accumulated depreciation. In your case its 8,338. At the end of the depreciation accumulated will be -8,338 for a net BV of 0.
    bklynboy, Dec 21, 2017
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