A central air conditioning unit was installed on January 1, 2000 at an initial cost ofP650,000 and was expected to have a salvage value of P50,000 after a life of 7years.a. What amount of depreciation had accumulated in a sum-of-the-years'-digitmethod at the end of 2003?b. Using the declining balance method, determine the depreciation chargedfor 2004 and the bookvalue at the end of 2004c. If the equipment was sold on Jan 1, 2005 for P100,000, what amount of losswould result from this sale if sinking fund method was being used with interestof 12% per year?

Depreciation represents the reduction in the value of an asset over a useful life of the asset.

Answered: A central air conditioning unit was…

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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A central air conditioning unit was installed on January 1, 2000 at an initial cost of P650,000 and was expected to have a salvage value of P50,000 after a life of 7 years.