11. Zach's Corporation purchased a Jacquard machine for P6M, freight andinstallation charges amounted to 3% of the purchase price. If the machine willbe depreciated over a period of 10 years with a salvage value of 6%, determinethe depreciation cost during the 5th year using the SLM method.12. An electric sewing machine costs P10,000 with a salvage value of P500 atthe end of 10 years. Calculate the annual depreciation cost by the sinking fundmethod at 5% interest.13. CMM Company was constructed at a first cost of PSM and with estimatedsalvage value of X at the end of 25 years. Find the value of X using sinkingfund if the book value amounted to P5,480,093.88 at the end of 15 years with aninterest rate of 10% annually.14. An asset for drilling was purchased and place in service by a petroleumproduction company. Its initial investment is P50,000 and it has an estimatedsalvage value of P13,000 at the end of an estimated useful life of 10 years.Compute the book value at the end of the 5th year of life using SFM at 10%interest, using DBM and DDBM.15. The large profitable corporation has purchased a jet plane for use by itsexecutives. The cost of the plane is P76M. It has a useful life of 5 years. Theestimate resale of the plane is P6M. Determine its book value at the end of 3years. Using DBM and DDBM

Name: 11. Zach's Corporation purchased a Jacquard machine for P6M, freight
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Description: 11. Zach's Corporation purchased a Jacquard machine for P6M, freight andinstallation charges amounted to 3% of the purchase price. If the machine willbe depreciated over a period of 10 years with a salvage value of 6%, determinethe depreciation cost

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11. Zach's Corporation purchased a Jacquard machine for P6M, freight and installation charges amounted to 39% of the purchase price. If the machine will be depreciated over a period of 10 years with a salvage value of 6%, determine the depreciation cost during the 5th year using the SLM method.

11. Zach's Corporation purchased a Jacquard machine for P6M, freight and installation charges amounted to 39% of the purchase price. If the machine will be depreciated over a period of 10 years with a salvage value of 6%, determine the depreciation cost during the 5th year using the SLM method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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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Question

11. Zach's Corporation purchased a Jacquard machine for P6M, freight and
installation charges amounted to 3% of the purchase price. If the machine will
be depreciated over a period of 10 years with a salvage value of 6%, determine
the depreciation cost during the 5th year using the SLM method.
12. An electric sewing machine costs P10,000 with a salvage value of P500 at
the end of 10 years. Calculate the annual depreciation cost by the sinking fund
method at 5% interest.
13. CMM Company was constructed at a first cost of PSM and with estimated
salvage value of X at the end of 25 years. Find the value of X using sinking
fund if the book value amounted to P5,480,093.88 at the end of 15 years with an
interest rate of 10% annually.
14. An asset for drilling was purchased and place in service by a petroleum
production company. Its initial investment is P50,000 and it has an estimated
salvage value of P13,000 at the end of an estimated useful life of 10 years.
Compute the book value at the end of the 5th year of life using SFM at 10%
interest, using DBM and DDBM.
15. The large profitable corporation has purchased a jet plane for use by its
executives. The cost of the plane is P76M. It has a useful life of 5 years. The
estimate resale of the plane is P6M. Determine its book value at the end of 3
years. Using DBM and DDBM

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