An engineer bought equipment for P500,00O. HE spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the equipment is 1O years. The salvage value is x% of the first cost. Using Straight line method of depreciation the book value at the of 5 years will be P291,500. What is the value of x? 16.60 12.00 10.00 O 14.50
An engineer bought equipment for P500,00O. HE spent an additional amount of P30,000 for installation and other expenses. The estimated useful life of the equipment is 1O years. The salvage value is x% of the first cost. Using Straight line method of depreciation the book value at the of 5 years will be P291,500. What is the value of x? 16.60 12.00 10.00 O 14.50
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 1P
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![An engineer bought equipment for P500,000. HE spent an additional amount of
P30,000 for installation and other expenses. The estimated useful life of the
equipment is 10 years. The salvage value is x% of the first cost. Using Straight line
method of depreciation the book value at the of 5 years will be P291,500. What is
the value of x?
16.60
12.00
10.00
14.50](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda981f1d-c283-4f33-81c7-6282e58f45f5%2Ff2dd42e2-0441-47f3-8148-ad6aa85d7aef%2Fl96sgpb_processed.png&w=3840&q=75)
Transcribed Image Text:An engineer bought equipment for P500,000. HE spent an additional amount of
P30,000 for installation and other expenses. The estimated useful life of the
equipment is 10 years. The salvage value is x% of the first cost. Using Straight line
method of depreciation the book value at the of 5 years will be P291,500. What is
the value of x?
16.60
12.00
10.00
14.50
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