Johnson acquired for a lumpsum price of P6,000,000 a piece of land and the building on it. The land and building have fair values of P4,2000,000 and P2,800,000 respectively. The building is still usable but the entity plans to demolish it and construct a new building. Later, total demolition cost incurred was P400,000 but scraps were gathered and sold for P50,000. The new building had a total construction cost of P7,000,000, useful life of 25 years, and a salvage value of P500,000. Question 1. Assuming that a new wing was constructed 5 years later for a total cost of P1,000,000 and it is expected to have a useful life of 15 years, how much would the depreciation expense per year be from the expanded building? (Good Accounting Form
Johnson acquired for a lumpsum price of P6,000,000 a piece of land and
the building on it. The land and building have fair values of
P4,2000,000 and P2,800,000 respectively. The building is still usable
but the entity plans to demolish it and construct a new building.
Later, total demolition cost incurred was P400,000 but scraps were
gathered and sold for P50,000. The new building had a total
construction cost of P7,000,000, useful life of 25 years, and a
salvage value of P500,000.
Question 1. Assuming that a new wing was constructed 5 years later for
a total cost of P1,000,000 and it is expected to have a useful
life of 15 years, how much would the
per year be from the expanded building? (Good Accounting Form)
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