A telephone company purchased a Communications Trainer worth P 250,000. Freight and insurance charges amounted to P 18,000; customs’, cargo and broker’s fee, P 8,500; taxes, permits, and other expenses, P 25,000. If the estimated life of the trainer is 10 years with a salvage value at the end of life of P 20,000, determine the following using DBM and SYDM: a. the depreciation charge during the 4th year and book value at the end of 6 years using Declining Balance Method. b. the depreciation charge during the 4th year and book value at the end of 6 years using Sum-Of-The-Years Digit Method.
A telephone company purchased a Communications Trainer worth P 250,000. Freight and insurance charges amounted to P 18,000; customs’, cargo and broker’s fee, P 8,500; taxes, permits, and other expenses, P 25,000. If the estimated life of the trainer is 10 years with a salvage value at the end of life of P 20,000, determine the following using DBM and SYDM: a. the depreciation charge during the 4th year and book value at the end of 6 years using Declining Balance Method. b. the depreciation charge during the 4th year and book value at the end of 6 years using Sum-Of-The-Years Digit Method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A telephone company purchased a Communications Trainer worth P 250,000. Freight and insurance charges amounted to P 18,000; customs’, cargo and broker’s fee, P 8,500; taxes, permits, and other expenses, P 25,000. If the estimated life of the trainer is 10 years with a salvage value at the end of life of P 20,000, determine the following using DBM and SYDM:
a. the depreciation charge during the 4th year and book value at the end of 6 years using Declining Balance Method.
b. the depreciation charge during the 4th year and book value at the end of 6 years using Sum-Of-The-Years Digit Method.
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