Problem 33-15 (AICPA Adapted) Frey Company purchased a machine for P 4,500,000 on January 1, 2010.

The machine has an estimated useful life of four years and a residual value of P 500,000. The machine is
being depreciated using the sum of the years digits method. What is the carrying amount of the asset on
December 31, 2011? a.) 2,900,000 b.) 2,700,000 c.) 1,700,000 d.) 1,350,000 Solution 33-15 answer c.
SYD=1+2+3+4 10 Acquisition cost 4,500,000 less; accumulated depreciation 2010 (4/10 x 4,000,000)
1,600,000 2011 (3/10 x 4,000,000) 1,200,000 2,800,000 Carrying amount, Dec. 31, 2011 1,700,000
Problem 33-16 (AICPA Adapted) On April 1, 2010, Kew Company purchased new machinery for
3,000,000. The machinery has ad estimated useful life of five years and depreciation is computed by the
SYD. What is the accumulated depreciation of the machinery on December 31,2011? a.) 1,600,000 b.)
1,800,000 c.) 1,200,000 d.) 1,000,000 Solution 33-16 answer a. SYD – 1+2+3+4+5 = 15 April 1, 2010 to
March 31, 2011 (5/15 x 3,000,000) 1,000,000 April 1, 2011 to March 31, 2012 (4/15 x 3,000,000)
800,000 accumulated depreciation, March 31, 2012 1,800,000 April 1, 2010 – December 31, 2010
(1,000,000 x 9/12) 750,000 January 1, 20100 – March 31, 2011 (1,000,000 x 3/12) 250,000 April 1, 2011
– December 31, 2011 (800,000 x 9/12) 600,000 Total depreciation – December 31, 2011 850,000
Accumulated Depreciation – Dec. 31, 2011 (750,000 + 850,000) 1,600,000 Problem 33-17 AAICPA
Adapted) On January 1, 2008, Mogul Company acquired equipment to be used in its manufacturing
operations. The equipment has an estimated useful life of 10 years and an estimated residual value of P
50,000. The depreciation applicable to this equipment was P 240,000 for 2010 computed under the SYD
method. What was the acquisition cost of the equipment? a. 1,650,000 b. 1,700,000 c. 2,400,000 d.
2,450,000 Solution 33-17 answer b. SYD = 1+2+3+4+5+6+7+8+9 +10 = 55 The first three fractions are:
2008 10/55 2009 9/55 2010 8/55 Thus, the 2010 depreciation of P 240,000 is equal to 8/55 Depreciable
amount (240,000/ 8/55) 1,650,000 Residual value 50,000 acquisition cost 1,700,000 Problem 33-18
(AICPA Adapted) Rago Company takes a full year’s depreciation expense in the year of an asset’s
acquisition and no depreciation expense in the years of disposition. Data relating to one of Rago’s
depreciable assets on December 31, 2009 are as follows; Acquisition year 2007 cost 1,100,000 residual
value 200,000 accumulated depreciation 720,000 estimated useful life 5 years Using the same
depreciation method in 2007, 2008 and 2009, how much depreciation expense should Rago record in
2010 for the asset? a.) 120,000 b.) 180,000 c.) 220,000 d.) 240,000 Solution 33-18 Answer a. The
accumulated depreciation on Dec. 31, 2009 is recomputed following a certain method. The same is
arrived at following the SYD as follows; SYD= 1+2+3+4+5 = 15 2007 (5/15 x 900,000) 300,000 2008 (4/15
x 900,000) 240,000 2009 (3/15 x 900,000) 180,000 Accumulated Depreciation – Dec. 31, 2009 720,000
Accordingly, the SYD is followed for 2010. 2010 depreciation (2/15 x 900,000) 120,000