On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was estimated to be P12,000. The equipment will be depreciated over ten years using the double-declining- balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation expense for 2005 on this equipment of P90,000 P78,840 P81,000
On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was estimated to be P12,000. The equipment will be depreciated over ten years using the double-declining- balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation expense for 2005 on this equipment of P90,000 P78,840 P81,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 8MC: On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was...
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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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![On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was
estimated to be P12,000. The equipment will be depreciated over ten years using the double-declining-
balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation
expense for 2005 on this equipment of
P90,000
OP78,840
P81,000
OP72,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F328a836c-cd7b-454a-ace1-d93be5121818%2F57d0dc7f-da2a-40f8-9fc4-8429ecc2e110%2Fns9hogg_processed.png&w=3840&q=75)
Transcribed Image Text:On July 1, 2004, Gonzalez Corporation purchased factory equipment for P450,000. Salvage value was
estimated to be P12,000. The equipment will be depreciated over ten years using the double-declining-
balance method. Counting the year of acquisition as one-half year, Gonzalez should record depreciation
expense for 2005 on this equipment of
P90,000
OP78,840
P81,000
OP72,000
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