1. Please explain the concept of depreciation in your own words and discuss why it is important. Wouldn't it make more sense for companies to fully expense fixed assets in the year of purchase rather than depreciating them over time?

(2) What is the definition of a fixed asset and which expenditures can be added to the capitalized cost of a fixed asset?

(3) Please define the term "Net book value."

(4) Assume a company purchased a forklift on May 2, 20Y6 for $23,000. The residual value of the forklift is $500 and the estimated useful life is 10 years. The company uses the straight-line method to depreciate the forklift. What is the net book value of the forklift as of December 31, 20Y6? Please explain your answer and show your work.

(5) Suppose the same company sells the forklift on November 1, 20Y9 for $14,000. What is the net book value on the day of the sale? Please explain your answer and show your work.