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 7years. 1. Using the declining balance method, determine the depreciation charged for 2004 and the bookvalue at the end of 2004 2. If the equipment was sold on Jan 1, 2005 for P100,000, what amount of loss would result from this sale if sinking fund method was being used with interest of 12% per year?
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 7years. 1. Using the declining balance method, determine the depreciation charged for 2004 and the bookvalue at the end of 2004 2. If the equipment was sold on Jan 1, 2005 for P100,000, what amount of loss would result from this sale if sinking fund method was being used with interest of 12% per year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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 7years.
1. Using the declining balance method, determine the
for 2004 and the bookvalue at the end of 2004
2. If the equipment was sold on Jan 1, 2005 for P100,000, what amount of loss
would result from this sale if sinking fund method was being used with interest
of 12% per year?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education