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ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P 120,000. Assuming that the upgrading costs improved the quality of the asset's output, what is the revised depreciation expense for the third year using the straight-line method? * E D P 152,500 O P 135,000

ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P 120,000. Assuming that the upgrading costs improved the quality of the asset's output, what is the revised depreciation expense for the third year using the straight-line method? * E D P 152,500 O P 135,000

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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ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P 120,000. Assuming that the upgrading costs improved the quality of the asset's output, what is the revised depreciation expense for the third year using the straight-line method? * G O P 152,500 O P 135,000 O P 105,000 P 116,666.67
Transcribed Image Text:ABC Company has an equipment costing P 700,000 with an estimated residual value of P 70,000 and an estimated useful life of six years. After using and depreciating the asset for the past two years, the company upgraded the machine parts and the cost of upgrading amounted to P 120,000. Assuming that the upgrading costs improved the quality of the asset's output, what is the revised depreciation expense for the third year using the straight-line method? * G O P 152,500 O P 135,000 O P 105,000 P 116,666.67
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