PACIFIC SOUTHBAY COLLEGE, INC.

Purok Carmenville, Calumpang, General Santos City

 

Acctg 24
Name: Louie Jay J. Bialan_BSA 2
MODULE 3 DEPRECIATION

Problem 30-1 (IAA)

Amicable Company
Answer:

a. Depreciation Table- Straight line

Year Particulars Depreciation Accumulated Carrying

Depreciation Amount

Acquisition cost P 635,000

2019 P 120,000 P 120,000 515,000
2020 120,000 240,000 395,000
2021 120,000 360,000 275,000
2022 120,000 480,000 155,000
2023 120,000 600,000 35,000
P 600,000

b. Depreciation Table- Service Hours Method

Year Particulars Depreciation Accumulated Carrying

Depreciation Amount

Acquisition cost P 635,000

2019 P 14,000x10 P 140,000 P 140,000 495,000
2020 13,000x10 130,000 270,000 365,000
2021 10,000x10 100,000 370,000 265,000
2022 11,000x10 110,000 480,000 155,000
2023 12,000x10 120,000 600,000 35,000
P 600,000

Depreciation rate per hour = P 600,000/60,000= 10

 c. Depreciation Table- Production Method

Year Particulars Depreciation Accumulated Carrying

Depreciation Amount

Acquisition cost P 635,000

2019 P 34,000x4 P 136,000 P 136,000 499,000
2020 32,000x4 128,000 264,000 371,000
2021 25,000x4 100,000 364,000 271,000
2022 29,000x4 116,000 480,000 155,000
2023 30,000x4 120,000 600,000 35,000
P 600,000

Depreciation rate unit of output = P 600,000/150,000= 4

Problem 30-2 (IAA)

Austere Company
Answer:

a. Straight line method:

2019 P 27,500
2020 55,000

b. Working hours method:

Rate per hour = P 550,000/50,000 hours= 11

2019 (P 3,000 hoursx11) P 33,000

2020 ( 5,000 hoursx11) 55,000

c. Output Method:
Rate per unit = P 550,000/200,000 hours= 2.75

2019 (P 18,000 unitsx2.75) P 49,500

2020 ( 22,000 unitsx2.75) 60,500
Problem 30-3 (IAA)
Definite Company
Answer:

Asset Cost Salvage Depreciation Life in Annual

cost years Dep’n

Machinery P 310,000 P 10,000 P 300,000 5 P 60,000

Office equipment 110,000 10,000 100,000 10 10,000
Building 1,600,000 100,000 1,500,000 15 100,000
Delivery equipment 430,000 30,000 400,000 4 100,000
P2,450,000 P2,300,000 P 270,000

a. Composite rate= P 270,000/2,450,000= 11.02%

b. Composite life= P2,300,000/270,000= 8.52 years

c. Depreciation P 270,000
Accumulated Depreciation P 270,000

Problem 30-4 (ACP)

Happy Company
Answer:

Asset Cost Salvage Depreciation Life in Annual

cost years Dep’n

Building P 6,100,000 100,000 P 6,000,000 20 P 300,000

Machinery 2,550,000 50,000 2,500,000 5 500,000
Equipment 1,030,000 30,000 1,000,000 10 100,000
P9,680,000 P9,500,000 P900,000

a. Composite rate= P 900,000/9,680,000= 9.3%

b. Composite life= P9,500,000/900,000= 10.56 years

c. Depreciation P 900,000
Accumulated Depreciation P 900,000

d. Cash P 40,000
Accumulated Depreciation 2,510,000
Machinery P 2,550,000
e. Depreciation P 663,090
 Accumulated Depreciation P 663,090
(P 9,680,000-2,550,000x9.3%)

Problem 31-1 (ACP)

Bitter Company
Answer:

Sum of years digit

1. A

April 1,2019- March 31, 2020 (P 1,080,000x8/36) P 240,000

April 1,2020- March 31, 2021 ( 1,080,000x7/36) 210,000

Depreciation from April 1 to December 31, 2019 (P 240,000x9/12) P 180,000

2. B

Depreciation for 2020:

January 1- March 31 (P 240,000x3/12) P 60,000

April 1- December 31 ( 210,000x9/12) 157,500
P 217,500
Double declining balance

3. C
4. C

Fixed rate=100/8=12.5x2=25%

2019 (P 1,200,000x25%x9/12) P 225,000

2020 ( 1,200,000- 225,000x25%) 243,750