Answered: How much depreciation expense should…

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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An equipment was purchased on January 2, 2019 by Dora Incorporated from a private individual paying cash of P2,000,000; issuing 10,000 of its P100 par value shares (with fair value of P120 on January 2, 2019); and a 3-year, non-interest bearing, P3,000,000 face value notes payable. Prevailing rate of interest on the notes payable on January 2, 2019 was at 12%. Dora uses SYD in depreciating this equipment and estimates useful life of 8 years with P50,000 residual value.

How much depreciation expense should Dora Company recognized in its income statement for the year ending December 31, 2022?

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