Answered: the owner wishes to replace the old…

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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Problem 4: A heavy planner was purchased 12 years ago for P 50,000 with no salvage
value. As the life of the planner was 20 years, a depreciation reserve has been provided
on that basis. Now the owner wishes to replace the old planner by a newly – designed
planner with several advantages. The old planner can sell for P 10,000. If the new planner
costs P 70,000, how much new capital will be required to make the purchase if the
depreciation is computed using
1. SL Method
2. SF Method at 10%
3. SYD Method

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