Ventura Corporation purchased machinery on January 1, 2019 for P630,000. The company used the sum-of-the-years'- digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2020, Ventura changed to the straight-line depreciation method for this asset. The following facts pertain: Under the Straight line method, P105,000 and P105,000 for years 2019 and 2020 respectively; Under the Sum-of-the-year's digits method, P180,000 and P150,000 for 2019 and 2020 respectively. Ventura is subject to a 40% tax rate.The amount that Ventura should report for depreciation expense on its 2011 income statement is (A P120,000. (B none of the above. P75,000. D) P105,000.

Ventura Corporation purchased machinery on January 1, 2019 for P630,000. The company used the sum-of-the-years'- digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2020, Ventura changed to the straight-line depreciation method for this asset. The following facts pertain: Under the Straight line method, P105,000 and P105,000 for years 2019 and 2020 respectively; Under the Sum-of-the-year's digits method, P180,000 and P150,000 for 2019 and 2020 respectively. Ventura is subject to a 40% tax rate.The amount that Ventura should report for depreciation expense on its 2011 income statement is (A P120,000. (B none of the above. P75,000. D) P105,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

Ventura Corporation purchased machinery on January 1, 2019 for P630,000. The company used the sum-of-the-years'-
digits method and no salvage value to depreciate the asset for the first two years of its estimated six-year life. In 2020,
Ventura changed to the straight-line depreciation method for this asset. The following facts pertain: Under the Straight
line method, P105,000 and P105,000 for years 2019 and 2020 respectively; Under the Sum-of-the-year's digits method,
P180,000 and P150,000 for 2019 and 2020 respectively. Ventura is subject to a 40% tax rate.The amount that Ventura
should report for depreciation expense on its 2011 income statement is
A P120,000.
B none of the above.
P75,000.
D P105,000.

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