How much the asset originally cost

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One of the most important concepts to understand in regards to depreciation expense and accumulated depreciation is its relationship to cash. Your good friend works for a company that has fixed assets that total $1,000,000 and Accumulated Depreciation of $950,000. Your dear friend tells you his company is going to use the $950,000 to replace the fixed assets.

Problem 1. Explain to him what accumulated depreciations represents and how it relates to cash.

Problem 2. Also throw in the name for cost less accumulated depreciation.

Problem 3. If you have a fixed asset on your books that has a book value of $100,000 and accumulated depreciation of $500,00 can you tell how much the asset originally cost?

Reference no: EM132808349

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