Around Jan 1, 2022, Coach Whip Corporation paid P5,000 for a piece of machinery. The same was projected to have an 8-year usable life. For comparable items, a straight line depreciation mechanism is in place. The asset is evaluated to have a sound value of P4, 500,000 on January 1, 2024. The asset has a recoverable value of P1, 375, 00 on January 1, 2027. On January 1, 2024, the revaluation excess is:

Around Jan 1, 2022, Coach Whip Corporation paid P5,000 for a piece of machinery. The same was projected to have an 8-year usable life. For comparable items, a straight line depreciation mechanism is in place. The asset is evaluated to have a sound value of P4, 500,000 on January 1, 2024. The asset has a recoverable value of P1, 375, 00 on January 1, 2027. On January 1, 2024, the revaluation excess is:

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Description: Around Jan 1, 2022, Coach Whip Corporation paid P5, 000 for a piece of machinery. The same wasprojected to have an 8-year usable life. For comparable items, a straight line depreciation mechanism isin place. The asset is evaluated to have a sound va

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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Concept explainers

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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Around Jan 1, 2022, Coach Whip Corporation paid P5, 000 for a piece of machinery. The same was
projected to have an 8-year usable life. For comparable items, a straight line depreciation mechanism is
in place. The asset is evaluated to have a sound value of P4, 500,000 on January 1, 2024. The asset has a
recoverable value of P1, 375, 00 on January 1, 2027. On January 1, 2024, the revaluation excess is:

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