SUM OF THE YEAR’S DIGIT METHOD A structure costs P12,000 new. It is estimated to have a new life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at the end of each year of life. Year Initial Book Value Depreciation Book Value 1 12, 000 2
SUM OF THE YEAR’S DIGIT METHOD A structure costs P12,000 new. It is estimated to have a new life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at the end of each year of life. Year Initial Book Value Depreciation Book Value 1 12, 000 2
SUM OF THE YEAR’S DIGIT METHOD A structure costs P12,000 new. It is estimated to have a new life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at the end of each year of life. Year Initial Book Value Depreciation Book Value 1 12, 000 2
A structure costs P12,000 new. It is estimated to have a new life of 5 years with a salvage value at the end of life of P1,000. Determine the book value at the end of each year of life.
Year
Initial
Book Value
Depreciation
Book Value
1
12, 000
2
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
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