Question

The depreciation expense can be determined by multiplying the total cost of a group of assets by the composite depreciation ________.

Answer 1

The depreciation expense can be determined by multiplying the total cost of a group of assets by the composite depreciation rate.

Step-by-step explanation:

The depreciation expense can be determined by multiplying the total cost of a group of assets by the composite depreciation rate. The composite depreciation rate is calculated by summing up the individual depreciation rates of the assets in the group.

For example, let's say you have three assets: Asset A with a depreciation rate of 10%, Asset B with a depreciation rate of 15%, and Asset C with a depreciation rate of 20%. To find the composite depreciation rate, you would add these rates together (10% + 15% + 20% = 45%). The depreciation expense would then be calculated by multiplying the total cost of the assets by the composite depreciation rate.

The depreciation expense for a group of assets can be determined by multiplying the total cost of the assets by the composite depreciation rate. This rate is calculated based on the combined expected useful lives and salvage values of all the assets in the group. Each year, the same fixed rate is applied to the total cost to allocate the expense over the assets' useful lives.