Activity 4 1. A truck costs P1,000,000 and has a scrap value of P1,000,000 after 10 years. Using The three methods, prepare the depreciation and the book value each year. Compute the total accumulated depreciation using the three methods: Straight Line (SL) Method. Declining Balance (DB) Method. Sum-of-the-Year's-Digit Method. 2. Based from your computation on the depreciation in number 1, which method would you select and why?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Year
Book Value
Depreciation
Depreciation
(Beginning of the Year)
Factor
1
P600,000-
P60,000=540,000
5/15
P180,000
2
360,000
216,000
4/15
144,000
3
3/15
108,000
108,000
2/15
72,000
36,000
4
36,000
1/15
Activity 4
1. A truck costs P1,000,000 and has a scrap value of P1,000,000 after 10 years.
Using The three methods, prepare the depreciation and the book value each
year. Compute the total accumulated depreciation using the three methods:
Straight Line (SL) Method.
Declining Balance (DB) Method.
Sum-of-the-Year's-Digit Method.
2. Based from your computation on the depreciation in number 1, which method
would you select and why?
Transcribed Image Text:Year Book Value Depreciation Depreciation (Beginning of the Year) Factor 1 P600,000- P60,000=540,000 5/15 P180,000 2 360,000 216,000 4/15 144,000 3 3/15 108,000 108,000 2/15 72,000 36,000 4 36,000 1/15 Activity 4 1. A truck costs P1,000,000 and has a scrap value of P1,000,000 after 10 years. Using The three methods, prepare the depreciation and the book value each year. Compute the total accumulated depreciation using the three methods: Straight Line (SL) Method. Declining Balance (DB) Method. Sum-of-the-Year's-Digit Method. 2. Based from your computation on the depreciation in number 1, which method would you select and why?
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