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14 June, 20:54

A piece of equipment costs $2,500. If this asset depreciates on a 5-year schedule, the Net Fixed Asset value on the Balance sheet in year 2 will be more or less than this same asset depreciating on a 3-year schedule?

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  1. 14 June, 21:09
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    Explanation:

    The computation of balance sheet after 2 will be more or less is shown below:-

    After 2 years

    Net fixed value after 2 years

    For 5 years schedule

    $2,500 - (($2,500 : 5) * 2)

    = $1,500

    For 2 year schedule

    $2,500 - (($2,500 : 3) * 2)

    = $833.33

    After 2 year Net fixed assets will be higher for 5 year schedule at schedule of 2 year.
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