A piece of earth-moving equipment was purchased at a cash price of P25,000. The life of this equipment was estimated at 6 years with no salvage value. However, at the end of 4 years, the machine had become so inefficient, because of waring of parts, that was replaced. Depreciation was allowed on the company books by the sinking fund method with a 4% interest. Determine the annual depreciation.

A piece of earth-moving equipment was purchased at a cash price of P25,000. The life of this equipment was estimated at 6 years with no salvage value. However, at the end of 4 years, the machine had become so inefficient, because of waring of parts, that was replaced. Depreciation was allowed on the company books by the sinking fund method with a 4% interest. Determine the annual depreciation.

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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