Depreciation

Monday, 2 August 2021 1:36 pm

Screen clipping taken: 20/09/2021 5:15 pm

The first cost of a machine is Php 1,800,000 with a salvage value of Php 300,000 at the end of its six years of life.
Determine the total depreciation after three years using the Straight Line Method of Depreciation.

• A commercial building has a salvage value of Php 1 million after 50

years. Annual depreciation is Php 2 M. Using the Straight Line
Method, how many years after should you sell the building for Php
30 M?
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30 M?

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Sample Problem
Monday, 2 August 2021 1:39 pm

1.) A machine cost 7,000 last 8 years and has a salvage value at the end of life of 350. Determine the depreciation charge du ring the 4th
year and the book value at the end of 4 years by the (a) SLM (b) Declining Balance Method (c) SYD Method (D) Sinking fund met hod with
interest at 12%.

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Sample problem
Monday, 2 August 2021 3:03 pm

2. Power to a remote transmitting station is provided by a diesel-electric generator unit.

The original cost of the unit is P65,000: It costs 2,000 to ship the unit to the job site. An
additional cost of 3,000 was incurred for installation. Determine the annual depreciation
by straight-line method if the unit has an expected life of 10 years. The salvage value of
the unit at the end of its life was estimated at 5,000.
Determine the annual depreciation cost by the sinking fund method. Assume the annual
charge for depreciation was deposited in a fund drawing compound interest at the rate of
5%

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