The boiler in a steam power plant costs P 25,000,000 and has a salvage value of P 850,000 at the end of 25 years. Determine the annual depreciation of the equipment using the Straight-line method and Sinking fund method at 5% compound interest annually. Provide the cashflow diagram of this problem

The boiler in a steam power plant costs P 25,000,000 and has a salvage value of P 850,000 at the end of 25 years. Determine the annual depreciation of the equipment using the Straight-line method and Sinking fund method at 5% compound interest annually. Provide the cashflow diagram of this problem

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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Step 1: Depreciation Expenses

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Step 2: Depreciation Expenses under Straight-Line Depreciation

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Step 3: Depreciation Expenses under Sinking Fund Method:

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Step 4: Cash Flow Diagram

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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