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General Accounting Discussions: Depriciation

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  1.  
    • CommentAuthorsanaullah
    • CommentTimeJun 11th 2008
     
    How can we calculate a Depricaition of a Machine and how Enter or Post these kind of transctions.

    Thanks
    • CommentAuthorsanaullah
    • CommentTimeJun 11th 2008
     
    I will be very glad if I receive my rplys.
    Regards
  3.  
    Go to irs.gov and get educated on the different depreciation methods available to you. Once you select a method the entry is as follows:

    Depreciation 1800
    Accumulated Depreciation 1800

    The above assumes you have set-up a property account on your balance sheet.

    Property 9000
    Less: Accumulated Depreciation 1800

    Notes Payable 9000
    • CommentAuthormomma4_5
    • CommentTimeJun 13th 2008
     
    this will depend on the depreciation method that you choose to use. Also, as nbrcruncher said, go to IRS.gov. Here you can figure what the useful life for MACRS (depreciation you have to use for tax purposes)is and the rate to which you are to depreciate. YOu can choose another method for your own bookkeeping but the government will only let you use so much for a deduction.

    As for the entries, you would use the following entry for each accounting period:

    Depreciation Expense XXXXX
    Accumulated Depreciation XXXXX

    THis will reduce your book value of your asset each period until it is full depreciated. Good luck
    • CommentAuthordkbook
    • CommentTimeJun 14th 2008
     
    Depreciation rules are fairly standard worldwide, rates may vary but the methods used are pretty standard.
    You can download a free depreciation calculator here: http://www.bassets.net/depcalc.asp
    The main thing is to choose the method that is best suited to your situation and stick with it for the life of the asset, most governments do not appreciate you changing the way you depreciate an asset mid stream.

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