1. Makati Development Corporation has won the bidding for the construction of a dam for hydroelectric power plant. It was estimated by their resident Civil Engineer that it would take 8 years to complete the project. The construction firm is going to buy a specialized machinery worth $600,000, and it can be sold for $60,000 after the completion of the dam. The schedule of utilization of the equipment has been prepared during the job cost estimation as follows: YEAR UTILIZATION (HR/YR) 1 6000 2 4000 3 4000 4 1600 5 800 6 800 7 2200 8 2200 Compute the annual depreciation schedule through the years, and the cumulative depreciation at the end of 8th year using: A. Sum-of-years' digit method B. Unit-of-production method
1. Makati Development Corporation has won the bidding for the construction of a dam for hydroelectric power plant. It was estimated by their resident Civil Engineer that it would take 8 years to complete the project. The construction firm is going to buy a specialized machinery worth $600,000, and it can be sold for $60,000 after the completion of the dam. The schedule of utilization of the equipment has been prepared during the job cost estimation as follows: YEAR UTILIZATION (HR/YR) 1 6000 2 4000 3 4000 4 1600 5 800 6 800 7 2200 8 2200 Compute the annual depreciation schedule through the years, and the cumulative depreciation at the end of 8th year using: A. Sum-of-years' digit method B. Unit-of-production method
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:1. Makati Development Corporation has won the bidding for the construction of a dam for
hydroelectric power plant. It was estimated by their resident Civil Engineer that it would
take 8 years to complete the project. The construction firm is going to buy a specialized
machinery worth $600,000, and it can be sold for $60,000 after the completion of the
dam. The schedule of utilization of the equipment has been prepared during the job
cost estimation as follows:
YEAR
UTILIZATION
(HR/YR)
6000
1
2
4000
3
4000
4
1600
5
800
6
800
7
2200
8
2200
Compute the annual depreciation schedule through the years, and the cumulative
depreciation at the end of 8th year using:
A. Sum-of-years' digit method
B. Unit-of-production method
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