A machine costs P 8,000 which last for 7 years with a salvage value at the end of its life of P 355. Determine the depreciation charge during the 4th year and the book value at the end of 4 years by: (a) Straight Line Method; (b) Declining Balance Method; (c) SOYD Method;
A machine costs P 8,000 which last for 7 years with a salvage value at the end of its life of P 355. Determine the depreciation charge during the 4th year and the book value at the end of 4 years by: (a) Straight Line Method; (b) Declining Balance Method; (c) SOYD Method;
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 3CE: A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years....
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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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Transcribed Image Text:A machine costs P 8,000 which last for 7 years with a salvage value at the end of its life of P 355. Determine the
depreciation charge during the 4th year and the book value at the end of 4 years by:
(a) Straight Line Method;
(b) Declining Balance Method;
(c) SOYD Method;
(d) Sinking Fund Method with interest of 12%;
(e) Double Declining Balance Method
(f) MACRS
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