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Unformatted text preview: Partial-year depreciation calculations. Partial-year depreciation expense calculations are necessary when depreciable assets are purchased, retired, or sold in the middle of an annual accounting period or when the company produces quarterly or monthly financial statements. The units-of-activity method is unaffected by partial-year depreciation calculations because the per-unit depreciation expense is simply multiplied by the number of units actually used during the period in question. For all other depreciation methods, however, annual depreciation expense is multiplied by a fraction that has the number of months the asset depreciates as its numerator and twelve as its denominator. Since depreciation expense calculations are estimates to begin with, rounding the time period to the nearest month is acceptable for financial reporting purposes. Suppose the truck is purchased on July 26 and the company's annual accounting period ends on...
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10