Question

Cost of the asset is calculated using the formula

• A. Purchase price + Maintenance + Repair costs
• B. Purchase price + Marketing costs + Sales commission
• C. Purchase price + Transport + Installation + Brokerage, etc
• D. Purchase price - Depreciation + Amortization

Answer 1

Answer:

C. Purchase price + Transport + Installation + Brokerage, etc

Factors Affecting the Amount of Depreciation:

• Cost of the asset = Purchase price + Transport + Installation + Brokerage, etc.

• Estimated Useful Life = Time period the asset will be used.

• Scrap or Residual Value = Estimated value at the end of its useful life.

• Depreciation Method = How depreciation is charged (Straight Line or WDV method)