An asset was purchased three years ago at a cost of P5,000. It was estimated to have a useful life of 8 years with a salvage value of P250 at the end of the time. It is now of no future use and can be sold for only P720. a. Straight-line method b. Sum-of-the-Years'-Digits (SYD) Method

An asset was purchased three years ago at a cost of P5,000. It was estimated to have a useful life of 8 years with a salvage value of P250 at the end of the time. It is now of no future use and can be sold for only P720. a. Straight-line method b. Sum-of-the-Years'-Digits (SYD) Method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Swifty Corporation purchased a depreciable asset for $359100. The estimated salvage value is $33500,…

A: Depreciation base of the asset = Cost - Salvage value

Q: A machine was purchased for $54,000 and it was estimated to have a $9,000 salvage value at the end…

A: Depreciation expense :— It is the allocation of depreciable cost of asset over the estimated useful…

Q: 2. An electronic computer was purchased by a company for $90,000 and is assumed to have a salvage…

A: Electronic Computer = $90,000 SAlvage Value = $10,000 Years = 10 Depreciation each year = [Cost -…

Q: Lloyd Company purchased a depreciable asset for P1,360,000. The estimated salvage value is P360,000,…

A: Lets discuss basics. Depreciation is a reduction in value of asset due to wear and tear,…

Q: 9.24 For each of four assets in the following table, determine the missing amounts (for asset type…

A: Depreciation means the loss in value of assets because of usage of assets , passage of time or…

Q: When originally purchased, a vehicle costing $25,380 had an estimated useful life of 8 years and an…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Carla Vista Company purchased a depreciable asset for $46000. The estimated salvage value is $5750,…

Q: An asset was purchased for $255000. It had an estimated salvage value of $55000 and an estimated…

A: Depreciation for each year = (Purchase cost - salvage value) ÷ Estimated life of the asset

Q: BE9.4 (LO 2), AP Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January…

A: Depreciation is considered as expense and it is required to be deducted from the revenues in the…

Q: Tiffany bought a piece of equivalent for $40,000. The equipment has a useful life of 5 years and a…

A: In the double declining method the beginning value of the period i.e. is (Value of equipment -…

Q: What is the depreciation deduction each year, using each of the methods below, for an asset that…

A: Depreciation is the reduction in the value of assets due to normal wear and tear, passage of time,…

Q: Question. Original cost of a machine was Rs. 2,52,000; Salvage value was 12,000. Useful Life was 6…

A: Depreciation expenditure refers to the decrease in asset value due to time consumption, wear and…

Q: An earth moving equipment has a first cost of P 25,000, estimated life of 6 years, with no salvage…

A: In Sinking fund method, the depreciation of the asset is calculated to accumulate the amount of…

Q: An asset was purchased for $257000. It had an estimated salvage value of $49000 and an estimated…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: A man bought an equipment which cost P524.000.00. Freight and installation expenses cost him…

A: Depreciation expense :— It is the allocation of depreciable cost of asset over the estimated useful…

Question

An asset was purchased three years ago at a
cost of P5,000. It was estimated to have a
useful life of 8 years with a salvage value of
P250 at the end of the time. It is now of no
future use and can be sold for only P720.
a. Straight-line method
b. Sum-of-the-Years'-Digits (SYD) Method

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

nku.4
The following information is available on a depreciable asset: Purchase date January 1, Year 1 Purchase price $96,000 Salvage value $10,000 Useful life 10 years Depreciation method straight-line The asset's book value is $78,800 on January 1, Year 3. On that date, management determines that the asset's salvage value should be $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during Year 3 would be: Multiple Choice $7,880.00 $9,225.00 $8,600.00 $7,380.00 $9,850.00
Please do not give solution in image format thanku
Consider a 5-year MACRS asset, which was purchased at $140,000. The asset was disposed of at end of year 5 with a salvage value of $50,000. What is amount of gain(or loss) when asset is disposed of ? O $33,872 O $11,280 O $17,744 O $16,128
Compute the declining-balance depreciation schedule for an asset with thefollowing data:
A plant asset cost $313600 and is estimated to have a $37000 salvage value at the end of its 8-year useful life. The annual depreciation expense recorded for the third year using the double-declining-balance method would be O $31170. O $39036. O $27720. O $44100.
Equipment costing $80000 with a salvage value of $11000 and an estimated life of 8 years has been depreciated using the straight-line method for 2 years. Assuming a revised estimated total life of 5 years and no change in the salvage value, the depreciation expense for year 3 would be O $20917. O $17250. O $10350. O $14450.
MNVK Corp. purchased a computer system at a cost of $140,000 on January 1, 20X1. The estimated useful life is 10 years, and the estimated residual value is $10,000. Assuming MNVK uses the double-declining-balance method, what is the depreciation expense for 20X2? Select one: a. $22,800 b. $28,000 c. $26,000 d. $22,400 e. $20,800
An equipment was bought at 600,000 JD. The life time of the equipment is 10 years at the end of which its salvage value is 10,000 JD. The depreciation rate using the straight line method is A. 10,000 JD B. 59,000 JD/year C. 59,000 JD D. 60,000 JD/year
Under the straight-line method, we base the annual depreciation charge on the depreciable amount and the estimated useful life of the asset. The depreciable amount is the cost of the asset minus its estimated salvage value: Regal Company Depreciation Charge: Straight-line method Cost = (A) $107,200 Minus: Salvage Value = (B) -$4,800 Depreciable Amount = (C ) = (A) - (B) $102,400 Useful Life in Years = (D) 8 Annual Depreciation = (C ) / (D) $12,800 2009 Depreciation Charge $12,800
d. The depreciation deduction for year 11 of an asset with a 20-year useful life is $3,600. If the salvage value of the asset was estimated to be zero and straight line depreciation was used to calculate the depreciation deduction for year 11, the initial cost of this asset is most closely equal to which of the following values? (a) $42,000 (b) $67,750 $72,500 (d) $80,000 e. Consider the following data extracted from an After Tax Cash Flow calculation. Before Tax Cash Flow = $22,500 Loan Principal Payment = $7,434 Loan Interest Payment = $892 MACRS Depreciation Deduction = $7,405 Taxes Due = $5,397 Which of the following is closest to the After Tax Cash Flow? (a) $1,372 $8,777 (c) $8,806 (d) $16,211
N6 A new machine tool is being purchased for $260,000 and is expected to have a $36,000 salvage value at the end of its 5-year useful life. Assume any remaining depreciation is claimed in the last year. Compute the depreciation schedules for this capital asset, using the following methods: (a) Straight-line depreciation (b) MACRS Note: No statement is required for this problem.