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A telephone company purchased a microwave radio equipment for 6,000,000.00. Freight and installation charges amounted to 3% of the purchased rice. If the equipment shall be depreciated over a period of 8 years with a salvage value of 5%, determine the following:   a.) Annual depreciation charge using the straight line method. b.) Depreciation charge during the 5th year using the sum-of-the year’s digits method

A telephone company purchased a microwave radio equipment for 6,000,000.00. Freight and installation charges amounted to 3% of the purchased rice. If the equipment shall be depreciated over a period of 8 years with a salvage value of 5%, determine the following:   a.) Annual depreciation charge using the straight line method. b.) Depreciation charge during the 5th year using the sum-of-the year’s digits method

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. A telephone company purchased a microwave radio equipment for 6,000,000.00. Freight and

installation charges amounted to 3% of the purchased rice. If the equipment shall be depreciated

over a period of 8 years with a salvage value of 5%, determine the following:

 

a.) Annual depreciation charge using the straight line method.

b.) Depreciation charge during the 5th year using the sum-of-the year’s digits method.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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