An asset was purchased 6 years ago for P6500. At that time its life and salvage value were estimated to be 10 years and P1500 respectively. If the asset is sold now for P1600, what is the difference between its market value of P1500 and its present book value if its depreciation has been by SYD method

An asset was purchased 6 years ago for P6500. At that time its life and salvage value were estimated to be 10 years and P1500 respectively. If the asset is sold now for P1600, what is the difference between its market value of P1500 and its present book value if its depreciation has been by SYD method

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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Question

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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Step 2 Calculation of Deprecation rates

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Step 3 Calculation of Book Value of asset

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