SEATWORK – DEPRECIATION

1. A manufacturing plant was built at a cost of P 5M and is estimated to have a life of 20 years with a salvage value of P 1M. A
certain equipment worth P 570,000.00 was installed at a cost of P 80,000.00 is expected to operate economically for 15
years with a salvage value of P 50,000.00. Determine the book value of the plant and equipment after 10 years, using
straight line method.

2. A printing equipment costs P 73,500.00 has a life expectancy of 8 years and has a salvage value of P 35,000.00 at the end
of its life. The book value at the end of “x” years is equal to P 38,500.00. Using straight line method of depreciation, solve
for the value of “x”.

3. An engineer bought an equipment for P 500,000.00 he spent an additional amount of P 30,000.00 for installment and other
expenses. The estimated life of the equipment is 10 years. The salvage value is x% of the first cost. Using the SLM of
depreciation, the book value at the end of 5 years will be P 291,500.00 What is the value of x?

4. A certain machinery costs P 50,000.00, last 12 years with a salvage value of P 5,000.00. Money is worth 5%. If the owner
decides to sell if after using it for 5 years, what should his price be so that he will not lose or gain financially in the
transaction. Use sinking fund method of depreciation.

5. An equipment costs P 7,000.00 has a life of 8 years and salvage value of “x” after 8 years. If the book value of the
equipment at the 4th years is equal to P 2,197.22 compute the salvage value “x” using SYDM.

6. A machine costing P 720,000.00 is estimated to have a life of 10 years. If the annual rate of depreciation is 25%, determine
the total depreciation using a constant percentage of the declining balance method.

7. A machine costing P 45,000.00 is estimated to have a salvage value of P 4,350.00 when retired at the end of 6 years.
Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of
depreciation in %?

8. Erectors Co. owns an earth moving equipment that cost P 90,000.00. After 8 years it will have an estimated salvage value
of P 18,000.00. Compute the depreciation charge using DDBM for the first two years and the book value at the end of the 5
years.

9. A machine cost P 38,000.00 and has a life of 5 years and a salvage value of P800.00. The production output of this
machine in units per day is: 1 st year 2,000 units, 2nd year 2,500 units, 3rd year 2,250 units, 4th year 1,750 units and 5th year
1,500 units. The depreciation will be charged by weighing the units produced according to their relative quality. This
method reflects the quality loss resulting from increased use of the machine. The quality weights assigned to this machine
are: 1st 4,000 units produced = 2.0, next 3,000 units = 1.5 and the remainder 1.0. compute the total depreciation charge for
the machine.