Answered: The equipment is worth P56,000 with a…

The equipment is worth P56,000 with a salvage value of P15,000 at the end of 5 years. If the depreciation cost on the first year is P12,992. What method of depreciation is used?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section9.A: Depreciation

Problem 1P

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

The equipment is worth P56,000 with a salvage value of P15,000 at the end of 5 years. If the depreciation cost on the first year is P12,992. What method of depreciation is used?

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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