An industrial plant bought a generator set for PHP 90,000. Other expenses including installation amounted to PHP 10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of PHP 5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the (a) declining balance method, (b) double declining balance method, (c) sinking fund method at 12% and (d) SYD method. A telephone company purchased a microwave radio equipment for PHP 6,000,000. Freight and installation charges amounted to 3% of the purchased price. 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 fifth year using the sum-of the-years-digits method. Determine the rate of depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs PHP 15,000 new and has an estimated scrap value of PHP 2,000 at the end of 10 years by (a) the declining balance method and (b) the double declining balance method. 4. During a certain month, a mining company has a gross income of PHP 6,500,000 from the production of gold. the expenses for this month excluding depletion is PHP 4,200,000 if the fixed depletion rate for gold is 15%, what is the depletion allowance for this month? 5. A coal mining company has owned a mine for the past five years. During this time the ff. tonnage of ore has been removed each year: 25,000; 32,000; 36,000; 30,000; and 28,000 tons. The mine is estimated to contain a total of 500,000 tons of coal. The initial cost of the mine is PHP 12,000,000. If the company had a gross income for this coal of PHP 220 per ton for the first two years, and PHP 300 per ton for the last 3 years, determine the depletion charge for each year using the larger values for the two methods. 6. The Carry All trucking Company uses three delivery trucks that cost PHP 100,000; P120,000; P25,000; and PHP 35,000. All trucks have an expected service life of 10 years. Determine the group depreciation rate and annual depreciation. 7. A tax and duty free importation of a 30 HP sand mill (for paint manufacturing) cost PHP 360,000, CIF Manila. Bank charges, arrastre and brokerage cost PHP 5,000. Foundation and installation costs were PHP 25,000. Other incidental expenses amounted to PHP 20,000. Salvage value of the mill, using straight-line depreciation, at the end of (a) 10 years and (b)15 years. 8. On January 1,1978, the purchasing engineer of a Cement Co. purchased a new machine at a cost of PHP 140,000. Depreciation has been computed by the straight-line method based on an estimated useful life of five years and residual scrap value of PHP 12,800 on January 2, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of the machinery) were performed at a cost of PHP 30,400. Because of the thorough going nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful life was four years from January 1, 1981. Determine the annual provisions for depreciation for the years 1978 to 1980 and the adjusted provision for depreciation on December 31, 1981. Assume payment in cash for the machine and extraordinary repairs. 9. Power to a remote transmitting station is provided by a Diesel electric generating unit. The original cost of the unit PHP 65,000. It costs PHP 2,000 to ship the unit to the job site. An additional cost of PHP 3,000 was incurred for installations. (a) Determine, the annual depreciation cost by the straight-line method, if the unit has an expected life of 10 years. The salvage value of the unit at the end of its life was estimated at PHP 5,000. (b) Determine the annual depreciation cost by the sinking fund method. Assume that the annual charge for depreciation was deposited in a fund drawing compound interest at the rate of 5%.
- An industrial plant bought a generator set for PHP 90,000. Other expenses including installation amounted to PHP 10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of PHP 5,000. Determine the depreciation charge during the 13th year and the book value at the end of 13 years by the (a) declining balance method, (b) double declining balance method, (c) sinking fund method at 12% and (d) SYD method.
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- A telephone company purchased a microwave radio equipment for PHP 6,000,000. Freight and installation charges amounted to 3% of the purchased price. 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 fifth year using the sum-of the-years-digits method.
- A telephone company purchased a microwave radio equipment for PHP 6,000,000. Freight and installation charges amounted to 3% of the purchased price. If the equipment shall be
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Determine the rate of depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs PHP 15,000 new and has an estimated scrap value of PHP 2,000 at the end of 10 years by (a) the declining balance method and (b) the double declining balance method.
4. During a certain month, a mining company has a gross income of PHP 6,500,000 from the production of gold. the expenses for this month excluding depletion is PHP 4,200,000 if the fixed depletion rate for gold is 15%, what is the depletion allowance for this month?
5. A coal mining company has owned a mine for the past five years. During this time the ff. tonnage of ore has been removed each year: 25,000; 32,000; 36,000; 30,000; and 28,000 tons. The mine is estimated to contain a total of 500,000 tons of coal. The initial cost of the mine is PHP 12,000,000. If the company had a gross income for this coal of PHP 220 per ton for the first two years, and PHP 300 per ton for the last 3 years, determine the depletion charge for each year using the larger values for the two methods.
6. The Carry All trucking Company uses three delivery trucks that cost PHP 100,000; P120,000; P25,000; and PHP 35,000. All trucks have an expected service life of 10 years. Determine the group depreciation rate and annual depreciation.
7. A tax and duty free importation of a 30 HP sand mill (for paint manufacturing) cost PHP 360,000, CIF Manila. Bank charges, arrastre and brokerage cost PHP 5,000. Foundation and installation costs were PHP 25,000. Other incidental expenses amounted to PHP 20,000. Salvage value of the mill, using straight-line depreciation, at the end of (a) 10 years and (b)15 years.
8. On January 1,1978, the purchasing engineer of a Cement Co. purchased a new machine at a cost of PHP 140,000. Depreciation has been computed by the straight-line method based on an estimated useful life of five years and residual scrap value of PHP 12,800 on January 2, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of the machinery) were performed at a cost of PHP 30,400. Because of the thorough going nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful life was four years from January 1, 1981. Determine the annual provisions for depreciation for the years 1978 to 1980 and the adjusted provision for depreciation on December 31, 1981. Assume payment in cash for the machine and extraordinary repairs.
9. Power to a remote transmitting station is provided by a Diesel electric generating unit. The original cost of the unit PHP 65,000. It costs PHP 2,000 to ship the unit to the job site. An additional cost of PHP 3,000 was incurred for installations.
(a) Determine, the annual depreciation cost by the straight-line method, if the unit has an expected life of 10 years. The salvage value of the unit at the end of its life was estimated at PHP 5,000.
(b) Determine the annual depreciation cost by the sinking fund method. Assume that the annual charge for depreciation was deposited in a fund drawing compound interest at the rate of 5%.
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