CE40/A1

SN D8 MARCH 08, 2017

VICTORIA, CRISTAL HAZE A.
2014101334 CE3
CO3/CPR4

A contractor bought a crane for erecting tall buildings. It was

invoiced from Japan CIF (cost, insurance, freight) Manila at
P2,500,000. Brokerage, bank, customs’ duties, permits, etc. total
P1,200,000. At the end of 10 years, he expects to sell it for
P500,000. Construct a schedule of the book value at the end of each
year using the following methods: (a) Straight-Line Formula, (b)
Sinking Fund Formula at 12%, (c) Matheson Formula (d) Double Declining
Method and (e) SYD Method.

(a) STRAIGHT LINE FORMULA

N BVB d D BVE
1 3700000 320000 320000 3380000
2 3380000 320000 640000 3060000
3 3060000 320000 960000 2740000
4 2740000 320000 1280000 2420000
5 2420000 320000 1600000 2100000
6 2100000 320000 1920000 1780000
7 1780000 320000 2240000 1460000
8 1460000 320000 2560000 1140000
9 1140000 320000 2880000 820000
10 820000 320000 3200000 500000
Co = 2.5M+1.2M = P3700000
L= 10 years = 10
Cl = 500T = P500000
BVB = P2420000
(b) SINKING FUND FORMULA

N BVB d D BVE
1 3700000 182349.325 182349.3 3517650.7
2 3517651 386580.57 568929.9 3313419.4
3 3313419 615319.563 1184249 3084680.4
4 3084680 871507.236 2055757 2828492.8
5 2828493 1158437.43 3214194 2541562.6
6 2541563 1479799.25 4693993 2220200.8
7 2220201 1839724.48 6533718 1860275.5
8 1860276 2242840.74 8776559 1457159.3
9 1457159 2694330.96 11470890 1005669
10 1005669 3200000 14670890 500000
CO=3700000
L=10
CL=500000
I=12%
d=182349.30

(c) MATHESON FORMULA

N BVB d D BVE
1 3700000 671144.5 671144.5 3028855
2 3028855 549405.3 1220550 2479450
3 2479450 449748.5 1670298 2029702
4 2029702 368168.4 2038467 1661533
5 1661533 301386.2 2339853 1360147
6 1360147 246717.6 2586571 1113429
7 1113429 201965.4 2788536 911464
8 911464 165330.8 2953867 746133.2
9 746133.2 135341.4 3089208 610791.8
10 610791.8 110791.8 3200000 500000
CO=3700000
K=0.18139
(d) DOUBLE DECLINING METHOD

N BVB d D BVE
1 2960000 740000 740000 2960000
2 2368000 592000 1332000 2368000
3 1894400 473600 1805600 1894400
4 1515520 378880 2184480 1515520
5 1212416 303104 2487584 1212416
6 969932 4/5 242483.2 2730067 969932 4/5
7 775946 6/25 193986.6 2924054 775946 6/25
8 620757 155189.2 3079243 620757
9 496605 19/32 124151.4 3203394 496605 19/32
10 496605 19/32 99321.12 3302716 397284 19/40
CO=3700000
K=1/5

(e) SYD METHOD

N BVB d D BVE
1 3700000 581818.1818 581818.1818 3118181 9/11
2 3118181.818 523636.3636 1105454.545 2594545 5/11
3 2594545.455 465454.5455 1570909.091 2129090 10/11
4 2129090.909 407272.7273 1978181.818 1721818 2/11
5 1721818.182 349090.9091 2327272.727 1372727 3/11
6 1372727.273 290909.0909 2618181.818 1081818 2/11
7 1081818.182 232727.2727 2850909.091 849090 10/11
8 849090.9091 174545.4545 3025454.545 674545 5/11
9 674545.4545 116363.6364 3141818.182 558181 9/11
10 558181.8182 58181.81818 3200000 500000
CO=3700000
CO-CL=3200000