3. Ten years ago, a tiny steam plant of 2000 KW capacity costing P225 per Kw was erected. The life was estimated at 15 years and the salvage value is 5% of the first cost. Abandoning the old plant in favor of a new diesel plant is being considered. A market for the old engine and boiler equipment has been found at Php15,000.00. The remainder of the old plant can be utilized in the new one and is given a valuation of Php8,500. Depreciation has been figured on a straight-line basis. What is the difference between the depreciated book value of the old plant and its sale value?

3. Ten years ago, a tiny steam plant of 2000 KW capacity costing P225 per Kw was erected. The life was estimated at 15 years and the salvage value is 5% of the first cost. Abandoning the old plant in favor of a new diesel plant is being considered. A market for the old engine and boiler equipment has been found at Php15,000.00. The remainder of the old plant can be utilized in the new one and is given a valuation of Php8,500. Depreciation has been figured on a straight-line basis. What is the difference between the depreciated book value of the old plant and its sale value?

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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Question

3. Ten years ago, a tiny steam plant of 2000 kW capacity costing P225 per Kw was erected. The life was
estimated at 15 years and the salvage value is 5% of the first cost. Abandoning the old plant in favor of
a new diesel plant is being considered. A market for the old engine and boiler equipment has been
found at Php15,000.00. The remainder of the old plant can be utilized in the new one and is given a
valuation of Php8,500. Depreciation has been figured on a straight-line basis. What is the difference
between the depreciated book value of the old plant and its sale value?

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