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Depreciation Problem
Depreciation Problem
Required: Compute the depreciation for 2022 and 2023 under each of the following methods:
a. Straight line
b. Production
Problem II. At the start of its business, Walter Corp. decided to use the composite method
of depreciation and prepared the following schedule of machinery owned.
Problem I. In 2022, Rock Company paid P2,640,000 for land having an ore body estimated to
contain 240,000 tons of ore. The land will have a value of P240,000 after exhaustion of the mine.
Building was set up at a cost of P1,920,000 and heavy equipment was purchased on
January 2, 2022 for P1,240,000. The heavy equipment is capable of exhausting the mine in 10
years and will have a salvage value of P140,000 at the end of its useful life. The life of the fixed
assets is as follows:
Building 20 years
Equipment 8
In 2023, 12,000 units have been extracted.
Required. Prepare all pertinent entries from 2022 to 2024 to . Show all supporting computations
in good form.