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P400,000 Year Purchased Useful life Salvage value Depreciation method 2014 2015 2016 2018 10 years P15,500 75,000 hours P15,000 Activity 15 years P25,000 Straight-line 10 years P25,000 Double-declinin balance SYD

P400,000 Year Purchased Useful life Salvage value Depreciation method 2014 2015 2016 2018 10 years P15,500 75,000 hours P15,000 Activity 15 years P25,000 Straight-line 10 years P25,000 Double-declinin balance SYD

FINANCIAL ACCOUNTING
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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Survive, Inc.'s property, plant and equipment at December 31, 2019: Original cost Year Purchased Useful life Salvage value Depreciation method 直真 P400,000 2016 15 years P25,000 Straight-line P400,000 P175,000 2014 P255,000 2015 75,000 hours P15,000 Activity 2018 10 years P15,500 SYD 10 years P25,000 Double-declining balance Note: In the year an asset is purchased, Survive, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Survive, Inc. takes full year depreciation on the asset.
Transcribed Image Text:Survive, Inc.'s property, plant and equipment at December 31, 2019: Original cost Year Purchased Useful life Salvage value Depreciation method 直真 P400,000 2016 15 years P25,000 Straight-line P400,000 P175,000 2014 P255,000 2015 75,000 hours P15,000 Activity 2018 10 years P15,500 SYD 10 years P25,000 Double-declining balance Note: In the year an asset is purchased, Survive, Inc. does not record any depreciation expense on the asset. In the year an asset is retired or traded in, Survive, Inc. takes full year depreciation on the asset.
The following transaction occurred during 2020: 1. On May 5, Asset P was sold for P65,000 cash. 2. Asset R was used for 10,500 hours during 2020. Accumulated usage as of December 31, 2019 is 40,800 hours. 3. On December 31, before computing depreciation expense on Asset T, the management of Survive, Inc. determined that the useful life remaining from January 1, 2020 is only 10 years. 4. On December 31, it was discovered that a plant asset purchased in 2019 had been expensed completely in that year. This asset costs P110,000 and has useful life of 10 years and no salvage value. Management has decided to use the double-declining balance for this asset, which can be referred to as "Asset I." QUESTIONS: Based on the above and the result of your audit, answer the following: (Disregard tax implications) 1. How much is the gain or loss on sale of Asset P? 2. How much is the depreciation of Asset T for 2020? 3. How much is the total depreciation expense for 2020? 4. How much is the adjusted cost of property, plant and equipment as of December 31, 2020? 5. How much is the camying amount of property, plant and equipment as of December 31, 2020?
Transcribed Image Text:The following transaction occurred during 2020: 1. On May 5, Asset P was sold for P65,000 cash. 2. Asset R was used for 10,500 hours during 2020. Accumulated usage as of December 31, 2019 is 40,800 hours. 3. On December 31, before computing depreciation expense on Asset T, the management of Survive, Inc. determined that the useful life remaining from January 1, 2020 is only 10 years. 4. On December 31, it was discovered that a plant asset purchased in 2019 had been expensed completely in that year. This asset costs P110,000 and has useful life of 10 years and no salvage value. Management has decided to use the double-declining balance for this asset, which can be referred to as "Asset I." QUESTIONS: Based on the above and the result of your audit, answer the following: (Disregard tax implications) 1. How much is the gain or loss on sale of Asset P? 2. How much is the depreciation of Asset T for 2020? 3. How much is the total depreciation expense for 2020? 4. How much is the adjusted cost of property, plant and equipment as of December 31, 2020? 5. How much is the camying amount of property, plant and equipment as of December 31, 2020?
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