1. An article costing P10,000 depreciates to P600 in 12 years. What is the annual depreciation?
1. An article costing P10,000 depreciates to P600 in 12 years. What is the annual depreciation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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with solution please.. thanks.
Transcribed Image Text:6.
A stereo depreciates from its original cost of P25,000 to P500 at the end of 8
years. Find its annual depreciation charge if money is worth 9 % converted
annually. Prepare a schedule of depreciation.
1
7. An article depreciated from its brand new price of P10,000 to P500 at the end
of 8 years of use. Find the periodic payment or replacement deposit if money
is worth 8% compounded annually.
8. Determine the annual payment for a fund, for furniture costing P5,000
4.
which has a scrap value of P1,000. After 8 years, the money is worth 5 %
compounded yearly.
Transcribed Image Text:Exercise 5.1
a) Solve each of the following:
1. An article costing P10,000 depreciates to P600 in 12 years. What is the annual
depreciation?
2. A sewing machine that costs P20,000 has an estimated life of 10 years and
has a salvage value of P500. Compute for the annual depreciation charge and
the rate of depreciation.
10
3. A bicycle depreciates from the original cost of P8,000 to a salvage value of
P400 in 6 years. What is the annual depreciation? Construct a schedule of
depreciation.
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