Depreciation is the wear and tear of a given asset over a period of time2) 150% declining method = cost - salvage value × 150%/No. of useful life= 1,65,000 × 150%/10 = 1,65,000 × 15% = $24,750
Depreciation is an accounting technique for spreading out the expense of a tangible item over the course of its useful life. How much of an asset's value has been used is shown through depreciation. It enables businesses to purchase assets over a predetermined period of time and generate income from those assets.
Depreciation is frequently mistaken to mean that something is merely losing value or that a computation is made for tax purposes. Although it is a complicated subject, depreciation plays a significant role in your company's tax returns.
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