insurance charges amounted to P28,000; customs and brokers fees is P8,500; taxes, permits and other expenses, P25,000. If Mr Sy estimates the life of the bulldozer to be 10 years with a salvage value of 320,000, determine the book value at the end of 7 years using:
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.
Mr Cruz imported a truck for his job, paying P550,000 to the manufacturer. Freight and
insurance charges amounted to P28,000; customs and brokers fees is P8,500; taxes,
permits and other expenses, P25,000. If Mr Sy estimates the life of the bulldozer to be
10 years with a salvage value of 320,000, determine the book value at the end of 7
years using:
1.
2. Sinking fund Method at 8%
3. Matheson Formula
4. Double Declining Balance Method
5. SYD Method
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