A certain factory has a first cost of P10,000,000 with a salvage value of P100,000 at the end of its 25-year life. Solve for its book value on the 15th year using a. Straight Line Method b. Sinking Fund Method @ i = 10% c. Declining Balance Method d. Double Declining Balance Method e. Sum of the Years Digit Method

A certain factory has a first cost of P10,000,000 with a salvage value of P100,000 at the end of its 25-year life. Solve for its book value on the 15th year using a. Straight Line Method b. Sinking Fund Method @ i = 10% c. Declining Balance Method d. Double Declining Balance Method e. Sum of the Years Digit Method

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Description: A certain factory has a first cost of P10,000,000 with a salvage value of P100,000at the end of its 25-year life. Solve for its book value on the 15th year usinga. Straight Line Methodb. Sinking Fund Method @ i = 10%c. Declining Balance Methodd. Dou

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.3.3MBA

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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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A certain factory has a first cost of P10,000,000 with a salvage value of P100,000
at the end of its 25-year life. Solve for its book value on the 15th year using
a. Straight Line Method
b. Sinking Fund Method @ i = 10%
c. Declining Balance Method
d. Double Declining Balance Method
e. Sum of the Years Digit Method

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