Answered: Sinking Fund method and c) Double…

Business

Accounting

Sinking Fund method and c) Double Declining Balance method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A machine costs P 8,000 which last for 7 years with a salvage value at the end of its life of P 355.…

A: Depreciation is the decrease in the value of the asset due to wear and tear over the useful life of…

Q: original cost. Determine the book value at the end of 12 years by (a) the straight line method and…

A: Purchase price = 65,000 pesos Add: Installation cost = 5,000 pesos Capitalised cost = 70,000 pesos…

Q: The boiler in a steam power plant costs P 25,000,000 and has a salvage value of P 850,000 at the end…

A: Straight line method :Under this method,a fixed percentage on the original cost of the asset is…

Q: A piece of equipment costs ₱355,000 including shipping, installation and taxes. The supplier assures…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Q/ A contractor bought a construction mechanism at a price of $80,000. Records indicate that the…

A: Cost of Machine = $ 80,000 Useful life = 6 years Salvage value = $ 10,000 1. Straight Line Method…

Q: An asset was acquired by Dave company with the following values: First cost= $100000, depreciable…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: A machine is to be purchased for Php155,000; it has an estimated life of 8 years and a salvage value…

A: Sinking Fund: A sinking fund consists of periodic (usually annual) contributions to a fund in order…

Q: The purchase of an item of construction equipment is fifty thousand Kenya shillings(kshs) . The…

A: Depreciation is the amount of reduction in the value of asset due to its normal usage in the…

Q: 2. A piece of specific office equipment has a first cost of Php20,000 and a salvage value of Php1000…

A: A tangible asset's cost is distributed throughout its useful life using depreciation expenditure in…

Q: The equipment in a power station costs IQD 30,000,000 and has a salvage value of IQD 1,200,000 at…

A: The depreciation is said to be decrease in value of an asset with the usage and passage of time.

Q: . Calculate the depreciation deduction and the unrecovered investment during each year of the

A: Depreciation is the expenses charged to profit and loss statement over the life of asset. it…

Q: A machinery worth BD20,000 has a lifetime of10 years and a salvage value of Rs. 1500. Calculate the…

A: Using the sinking fund method: Accumulated Depreciation=BD 12,584.21272 Book value at the end of…

Q: A reactor will be purchased for $ 30,000 for use in a chemical process. The life of the reactor is…

A: Dear student as you asked 3 questions , as per rule we will answer 1 and for…

Q: A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the…

A: Following are the calculation of depreciation rate under the declining method:

Q: Prepare a UOP depreciation schedule based on the given annual usage, then enter the book value at…

A: Depreciation is defined as the reduction in the value of fixed asset due to its usage and wear and…

Q: 4) A steam turbine was purchased five years ago at a price of P 2, 750, 000 including tax.…

A: Depreciation is the reduction in the value of an asset due to the normal usage in business.…

Q: NUBD Co. purchased a new machine on January 1 of this year for an amount of P85,000, with an…

A: Bail payback is calculated to know the length of time needed to pay back the initial invested amount…

Q: If the current value of a chemical plant is $ 800 thousand, its scrap value is $ 50 thousand, the…

A: Since you have posted question with multiple sub parts, we will solve first 3 sub parts for you. To…

Q: A price of the new machine purchased by ABC company was P50000 and expected to last for 14 years…

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…

Q: A company bought an equipment fee for P56,000. Other expenses including installation amounted to…

A: Depreciation: Due to usage, passes of time, obsolete and accident reduction in the value of fixed…

Q: Acompany purchases an industriallser for S140.000. The device has ausefu of yean and asahage…

A: The cost of the later is $140,000 and the life span s 4 years. The salvage value is 50000. The…

Q: Pamantasan ng Lungsod ng Maynila buys a solar panel unit for P105,000. The shipping and installation…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: A solar panel unit has been purchased by a company for electricity back up. The solar unit costs…

A: depreciation is decrease in monetory value of the asset due to wear and tear of the asset. annual…

Q: An industrial plant bought a generator set for 90,000. Other expenses including installation…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Consider the following data on an asset: • Cost of the asset = $38,000 • Useful life = 6 years •…

A: The depreciation on an asset can be charged by using different depreciation method such as straight…

Q: a) Determine the depreciation of the first year of equipment used for research. The initial…

A: Purchase price of Equipment: $4.2 million Useful life: 6years. Residual value $341 thousand

Q: (a) Declining balance method, (b) DDB method, (c) sinking fund method g iven interest rate at 12.5…

A: Since this is multi- part question, we are going to solve only first three parts for you. To get the…

Q: Mercury Drug purchased a Laboratory equipment for P 100,000 and plans to keep it for 15 years. If…

A: Depreciation is the allocation of cost of asset over the useful life of the asset. Several methods…

Q: A company purchases an asset of Php15,000 and plans to keep it for 20 years. If the salvage value is…

A: Under the sum of the years' digit method, each digit of the total life of an asset is added, and…

Q: Pads Corp. is contemplating the purchase of a large stamping machine which will cost Php 500.000.…

A: The question is based on the concept of Depreciation Accounting.

Q: If the current value of a chemical plant is $ 800 thousand, its scrap value is $ 50 thousand, the…

Q: 1. A commercial company plans to buy the device for $ 20,000 and is expected to sell it for $ 8,000…

A: Under this method, yearly depreciation rate is calculated by dividing remaining useful life to sum…

Q: a) an asset is purchased for $200,000. The estimated life is 8 years and the salvage value is…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: A piece of equipment costs ₱351,000 including shipping, installation and taxes. The supplier assures…

A: Sum - of-the -Years Digit method: The sum of the year's digit depreciation is one method for…

Q: Englehard purchases a slurry-based separator for the mining of clay that costs $700,000 and has an…

A: Depreciation: It refers to the gradual fall in the value of asset due to its normal use. in the…

Q: eciation charge during the 13th year and the book value at the end of 13 years by the (a) declining…

A: Total value of asset to be capitalised = P100,000 Salvage value = P5,000 Live of the Asset = 17Year…

Q: A company purchased an equipment costing $60,000. The equipment has guaranteed useful life of 16…

A: The formula for Depreciation as per the sinking fund method: Dt = ( A-S ) ( 1 + j )( t - 1 ) / Sn|j…

Question

An engineering firm purchased 25 years ago a mini power plant for Php 5.0 M. Other expenses including repairs amounted to Php 500,000. The mini power plant is up to next 25 years only and for the plant to operate. The salvage value is Php 500,000. Determine the depreciation charge during the 21ST and 41ST year. Also determine the book value at the end of 25th and 45th years if interest is 12% using a) Sum of the Years Digit method, b) Sinking Fund method and c) Double Declining Balance method . Always identify your final answer by using underline or rectangle.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

A melting machine in a steel plant cost $400000. The salvage value of the machine is 12.5% of the purchase cost. The machine will provide service for 8 years. (i) Prepare a depreciation schedule for the tax purposes (Annual depreciation and Book value) by Declining Balance method. Use a depreciation rate of percentage. (ii) Is the salvage value of the machine maintained in the record?
A piece of equipment costs ₱354,000 including shipping, installation and taxes. The supplier assures a salvage value of ₱24,000 after 20 years. Using the Sum-of-the-Years Digits method, what is the depreciation charge during the 5th year?
A company bought a machine for BD 250,000 which has a useful life of 10 years and can be sold for BD50,000 at the end of its useful life.Determine the depreciation on the 8th year and book value at the end of 8th year using sinking fund if interest is 12%. Prepare the depreciation schedules.
The first cost of a machine is $375,000 with a 7 years life. Annual interest rate is 20% and the expected annual maintenance cost of this machine is $15,000. For each case in the following, calculate the double declining balance depreciation payments if its salvage value is A) $85,000 B) $10,000 C) $35,575.
A piece of equipment is purchased for $110,000 and has an estimated salvage value of $10,000 at the end of the recovery period. Prepare a depreciation schedule for the piece of equipment using the sum-of-the-years method with a recovery period of seven years. Please answer in excel with each cells formula.
2. A company bought an electrical equipment worth Php 235,000 with useful life of 10 years. What are the b0ok values of the asset at the end of year if the equipment has a salvage value of Php 15,000 using: a. Straight Line Method b. Sinking Fund Method at 12% interest rate c. Declining Balance Method d. Double Declining Balance Method e. Sum-of-the-Year's-Digit Method
3. An industrial plant bought a generator set for Php90,000. Other expenses including installation amounted to Php10,000. The generator set is to have a life of 17 years with a salvage value at the end of life of Php5,000. Determine the depreciation charge during the 13th year and the book value at the of 13 years by the (a) declining balance method (b) sinking fund method (c) SYDmethod (d) double declining balance method.
2. A price of the new machine purchased by ABC company was P50,000 and expected to last for 14 years with a salvage value of P8,000. Determine the depreciation charge of the machine for the third year of its life and the book value at the end of 8 years using Sum of the Years' Digit
1. IMJR Company owns earth-moving equipment that costs Php98,000. After eight years, it will have an estimated salvage value of Php18,000. Compute the depreciation charge for each for the first two years and the book value at the end of 4 years by each of the following three depreciation methods. a. Straight-line method b. The sum of the years digit method c. Double declining balance method