A P110,000 chemical plant has an estimated life of 6 years and a scrapvalue of P10,000. After 3 years of operation an explosion made it a totalloss. How much money would have to be raised to put up a new plantcosting P150,000, if a depreciation reserve was maintained during itsthree years operation by straight line methodP80,000P100,000P120,000P180,000P123,000AP110,000 chemical plant has an estimated life of 6 years and a scrapvalue of P10.000. After 3 years of operation an explosion made it a totalloss. How much money would have to be raised to put up a new plantcosting P150.000, if a depreciation reserve was maintained during itsthree years operation by sinking fund method at 6% interestO P104,359.08eO P114,359.08O PI04,859.08O P108,359.08O P124,359.08

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Description: A P110,000 chemical plant has an estimated life of 6 years and a scrapvalue of P10,000. After 3 years of operation an explosion made it a totalloss. How much money would have to be raised to put up a new plantcosting P150,000, if a depreciation rese

Depreciation The purpose of preparing depreciation cost is to know the actual net value which are…

Business

Accounting

A P110,000 chemical plant has an estimated life of 6 years and a scrap value of P10,000. After 3 years of operation an explosion made it a total loss. How much money would have to be raised to put up a new plant costing P150.000, if a depreciation reserve was maintained during its three years operation by straight line method

A P110,000 chemical plant has an estimated life of 6 years and a scrap value of P10,000. After 3 years of operation an explosion made it a total loss. How much money would have to be raised to put up a new plant costing P150.000, if a depreciation reserve was maintained during its three years operation by straight line method

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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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.

Topic Video

Question

A P110,000 chemical plant has an estimated life of 6 years and a scrap
value of P10,000. After 3 years of operation an explosion made it a total
loss. How much money would have to be raised to put up a new plant
costing P150,000, if a depreciation reserve was maintained during its
three years operation by straight line method
P80,000
P100,000
P120,000
P180,000
P123,000
AP110,000 chemical plant has an estimated life of 6 years and a scrap
value of P10.000. After 3 years of operation an explosion made it a total
loss. How much money would have to be raised to put up a new plant
costing P150.000, if a depreciation reserve was maintained during its
three years operation by sinking fund method at 6% interest
O P104,359.08e
O P114,359.08
O PI04,859.08
O P108,359.08
O P124,359.08

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