Norraine Company used the composite method of depreciation based on acomposite rate of 25%.At the beginning of 2020, the total cost of equipment was P5,000,000 with atotal residual value of P600,000. The accumulated depreciation wasP3,000,000 at that time.In January 2020, the entity purchased an equipment for P2,500,000 with noresidual value.At the end of 2020, the entity sold an equipment with an original cost ofP1,000,000 and a residual value of P200,000 for P350,000. This asset wasacquired on January 1, 2018.1. What is the depreciation for 2020? TNTullGLOBE'9:247400:35:23 RemainingMultiple ChoiceOn July 1, 2019, an entitypurchased the rights to a minefor P20,000,000, of whichP2,000,000 was allocable tothe land. Estimated reserveswere 1,500,000 tons. The entityexpected to extract and sell25,000 tons per month.The entity purchased miningequipment on July 1, 2019for P8,000,000. The miningequipment had a useful life8 years. However, after allthe resource is removed, theequipment will be of no use andwill be sold for P500,000.What is the depreciation for 2019?O 1,500,0003 of 20>

Depreciation is the wear and tear of the asset. It occurs due to: Passage of time Usage…

Answered: 00:35:23 Remaining Multiple Choice On…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Norraine Company used the composite method of depreciation based on acomposite rate of 25%.At the beginning of 2020, the total cost of equipment was P5,000,000 with atotal residual value of P600,000. The accumulated depreciation wasP3,000,000 at that time.In January 2020, the entity purchased an equipment for P2,500,000 with noresidual value.At the end of 2020, the entity sold an equipment with an original cost ofP1,000,000 and a residual value of P200,000 for P350,000. This asset wasacquired on January 1, 2018.1. What is the depreciation for 2020?

TNT
ull
GLOBE
'9:24
74
00:35:23 Remaining
Multiple Choice
On July 1, 2019, an entity
purchased the rights to a mine
for P20,000,000, of which
P2,000,000 was allocable to
the land. Estimated reserves
were 1,500,000 tons. The entity
expected to extract and sell
25,000 tons per month.
The entity purchased mining
equipment on July 1, 2019
for P8,000,000. The mining
equipment had a useful life
8 years. However, after all
the resource is removed, the
equipment will be of no use and
will be sold for P500,000.
What is the depreciation for 2019?
O 1,500,000
3 of 20
>

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