Depreciation is the residual value of an asset
Step-by-step explanation:
Depreciation has been appeared in both profit and loss account and Balance sheet
In profit and loss account it was appeared in the debit side considering the depreciation as an expense and also it will appeared in the asset side of the balance sheet ., it must be deducted from the value of the related asset . since the asset was purchased in the beginning of the year 1 January 2018 and has a useful economic life of 5 years and zero residual value. under straight line depreciation method., the depreciation value can be calculated as
Purchase value of the asset/5 years., or
(20 percent of the purchase value of asset)
100/20 =5 years
