1. The initial cost of a paint sand mill, including its installation is P 700,000.00. The BIR approved life of this machine is 19 years for depreciation. The estimated salvage value of the mill is P8,000.00 and the cost of dismantling is estimated to be P 5,000.0o. Using straight line depreciation, what is the book value of the machine at the end of six years?
1. The initial cost of a paint sand mill, including its installation is P 700,000.00. The BIR approved life of this machine is 19 years for depreciation. The estimated salvage value of the mill is P8,000.00 and the cost of dismantling is estimated to be P 5,000.0o. Using straight line depreciation, what is the book value of the machine at the end of six years?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![1. The initial cost of a paint sand mill, including its installation is P 700,000.00.
The BIR approved life of this machine is 19 years for depreciation. The estimated
salvage value of the mill is P8,000.00 and the cost of dismantling is estimated to
be P 5,000.00. Using straight line depreciation, what is the book value of the
machine at the end of six years?
2. Equipment bought for P 87,000.00 is expected to last for 24 years. If the scrap
value after 20 years is P 60,000.00. How much is the depreciation for year 12?
3. Determine the rate of depreciation, the total depreciation up to the end of the
6th year and the book value at the end of 6 years for an asset that cost P 16,000.00
new and has an es
mated scrap value of P 2,000.00 at the end of 10 years by the
double declining balance method.
4. A firm bought an equipment for P 58,000.00. Other expenses inclu ding
installation amounted to P 2,000.00. The equipment is expected to have a life of
8 years with a salvage of 10% of the original cost. Determine the book value at
the end of 13 years by sinking fund method at 6% interest.
5. An asset is purchased for P 3,000.00. Its est imated life is 5 years after which is
will be sold for P 20,000.00. Find the depreciation for the first year using SYD.
6. A television company purchased machinery for P 100,000.00 on July 1, 2010. It
is estimated that it will have a useful life of 10 years, scrap value of P 4, 000.00,
production of 40,000 units and working hours of 120,000. The machine produces
44,000 units in 2011. Compute using service and hour method the 2011
depreciation.
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Transcribed Image Text:1. The initial cost of a paint sand mill, including its installation is P 700,000.00.
The BIR approved life of this machine is 19 years for depreciation. The estimated
salvage value of the mill is P8,000.00 and the cost of dismantling is estimated to
be P 5,000.00. Using straight line depreciation, what is the book value of the
machine at the end of six years?
2. Equipment bought for P 87,000.00 is expected to last for 24 years. If the scrap
value after 20 years is P 60,000.00. How much is the depreciation for year 12?
3. Determine the rate of depreciation, the total depreciation up to the end of the
6th year and the book value at the end of 6 years for an asset that cost P 16,000.00
new and has an es
mated scrap value of P 2,000.00 at the end of 10 years by the
double declining balance method.
4. A firm bought an equipment for P 58,000.00. Other expenses inclu ding
installation amounted to P 2,000.00. The equipment is expected to have a life of
8 years with a salvage of 10% of the original cost. Determine the book value at
the end of 13 years by sinking fund method at 6% interest.
5. An asset is purchased for P 3,000.00. Its est imated life is 5 years after which is
will be sold for P 20,000.00. Find the depreciation for the first year using SYD.
6. A television company purchased machinery for P 100,000.00 on July 1, 2010. It
is estimated that it will have a useful life of 10 years, scrap value of P 4, 000.00,
production of 40,000 units and working hours of 120,000. The machine produces
44,000 units in 2011. Compute using service and hour method the 2011
depreciation.
||
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