60. Equipment costing P588,000 has a useful life of five years with an P80,000 salvage value at the end of five years. How much is the depreciation expense for the year? A. P101,600 B. P100,600 C. P106,100 D. P100,100 61. Equipment costing P588,000 has a useful life of five years with an P80,000 salvage value at the end of five years. What is the adjusting entry? A. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment P101,600 B. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment P100,600 C. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment P106,100 D. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment P101,100 62. Received P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1 of the current year. How much is the balance of the unearned contract revenue ending December 31 of the current year? A. P4,500 B. P13,500 C. P18,000 D. P9,500 63. Received P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1 of the current year. What is the adjusting entry for this transaction at the end of the accounting period? A. Debit: Unearned Contract Revenue and Credit: Contract Revenue P4,500 B. Debit: Unearned Contract Revenue and Credit: Contract Revenue P13,500 C. Debit: Unearned Contract Revenue and Credit: Contract Revenue P18,000 D. Debit: Unearned Contract Revenue and Credit: Contract Revenue P9,500 64. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Century Savings Bank on October 1, 2021. How much is the amount of interest to be recognized as an adjustment on December 31, 2021? A. P1,750 B. P7,000 C. P3,500 D. P5,250
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.
60. Equipment costing P588,000 has a useful life of five years with an P80,000 salvage value at the end of five years. How much is the
A. P101,600
B. P100,600
C. P106,100
D. P100,100
61. Equipment costing P588,000 has a useful life of five years with an P80,000 salvage value at the end of five years. What is the
A. Debit: Depreciation Expense and Credit:
P101,600
B. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment
P100,600
C. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment
P106,100
D. Debit: Depreciation Expense and Credit: Accumulated Depreciation-Equipment
P101,100
62. Received P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1 of the current year. How much is the balance of the unearned contract revenue ending December 31 of the current year?
A. P4,500
B. P13,500
C. P18,000
D. P9,500
63. Received P18,000 cash advance for a contract to provide services in the future. The contract required a 1-year commitment, starting April 1 of the current year. What is the adjusting entry for this transaction at the end of the accounting period?
A. Debit: Unearned Contract Revenue and Credit: Contract Revenue P4,500
B. Debit: Unearned Contract Revenue and Credit: Contract Revenue P13,500
C. Debit: Unearned Contract Revenue and Credit: Contract Revenue P18,000
D. Debit: Unearned Contract Revenue and Credit: Contract Revenue P9,500
64. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Century Savings Bank on October 1, 2021. How much is the amount of interest to be recognized as an adjustment on December 31, 2021?
A. P1,750
B. P7,000
C. P3,500
D. P5,250
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