Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 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 P120,000. Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the (1) straight-line method and (2) sum-of-the-years’ digits method? a. (1) P90,000 and (2) P140,000 b. (1) P90,000 and (2) P120,000 c. (1) P101,667 and (2) P140,000 d. (1) P101,667 and (2) P120,000
Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 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 P120,000. Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the (1) straight-line method and (2) sum-of-the-years’ digits method? a. (1) P90,000 and (2) P140,000 b. (1) P90,000 and (2) P120,000 c. (1) P101,667 and (2) P140,000 d. (1) P101,667 and (2) P120,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 7E: Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for...
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Anne Company has an equipment costing P700,000 with an estimated residual value of P70,000 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 P120,000.
Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the
(1) straight-line method and
(2) sum-of-the-years’ digits method?
Assuming that the upgrading costs extended the asset’s economic useful life by an additional two years, what is the revised depreciation expense for the third year using the
(1) straight-line method and
(2) sum-of-the-years’ digits method?
a. (1) P90,000 and (2) P140,000
b. (1) P90,000 and (2) P120,000
c. (1) P101,667 and (2) P140,000
d. (1) P101,667 and (2) P120,000
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