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    Activity I. Straight Line Method

    Uploaded by

    Jhune Uraba
    1. The document provides examples of calculating depreciation and book value using the straight line and sinking fund methods. 2. Under the straight line method examples, it asks the reader to calculate book values, first costs, useful lives, and depreciation rates given various amounts for initial costs, salvage values, and time periods. 3. The sinking fund method examples similarly provide initial costs, salvage values, time periods and interest rates to calculate book values and depreciation amounts over the useful life of various assets.

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    Activity I. Straight Line Method

    Uploaded by

    Jhune Uraba
    118 views2 pages
    1. The document provides examples of calculating depreciation and book value using the straight line and sinking fund methods. 2. Under the straight line method examples, it asks the reader to calculate book values, first costs, useful lives, and depreciation rates given various amounts for initial costs, salvage values, and time periods. 3. The sinking fund method examples similarly provide initial costs, salvage values, time periods and interest rates to calculate book values and depreciation amounts over the useful life of various assets.

    Original Title

    econ 2nd last act

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    1. The document provides examples of calculating depreciation and book value using the straight line and sinking fund methods. 2. Under the straight line method examples, it asks the reader to calculate book values, first costs, useful lives, and depreciation rates given various amounts for initial costs, salvage values, and time periods. 3. The sinking fund method examples similarly provide initial costs, salvage values, time periods and interest rates to calculate book values and depreciation amounts over the useful life of various assets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    118 views2 pages

    Activity I. Straight Line Method

    Uploaded by

    Jhune Uraba
    1. The document provides examples of calculating depreciation and book value using the straight line and sinking fund methods. 2. Under the straight line method examples, it asks the reader to calculate book values, first costs, useful lives, and depreciation rates given various amounts for initial costs, salvage values, and time periods. 3. The sinking fund method examples similarly provide initial costs, salvage values, time periods and interest rates to calculate book values and depreciation amounts over the useful life of various assets.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    ACTIVITY

    I. STRAIGHT LINE METHOD

    1. An engineer bought an equipment for P500,000. Other expenses including


    installations amounted to P50,000. At the end of its estimated useful life of 10 years,
    the salvage value will be 10% of the first cost. Using straight line method of
    depreciation, what is the book value after 6 years?

    2. A machine has a salvage value of P10,000 at the end of its useful life of 6 years. The
    book value at the end of 5 years is P30,500. Using a straight line method of
    depreciation, what is the first cost of the machine?

    3. An engineer bought an equipment for P580,000. He spent an additional amount of


    P30,000 for installation and other expenses. The salvage value is 12% of the first cost.
    If the book value at the end of 5 years will be P291,500 using straight line method of
    depreciation, compute the useful life of the equipment in years.

    4. A machine has an initial cost of P50,00.00 and a salvage value of P15,000.00 after 10
    years. What is the book value after 5 years using straight line method depreciation
    rate?

    5. The Alpha Drug Company has just purchased a capsulating machine for $2,000,000.
    The plant engineer estimates that the machine has a useful life of five years and a
    salvage value of $25,000 at the end of its useful life. Compute the depreciation
    schedule for the machine by each of the following depreciation methods:

    (a) Straight line method of depreciation


    (b) Sum-of-the-years digits method of depreciation
    (c) Double declining balance method of depreciation

    II. SINKING FUND METHOD

    1. A certain office equipment has a first cost of P25,000 and has a salvage value of
    P1,000 at the end of 10 years. Determine the (a) depreciation at the end of the 6th
    year, (b) the book value of the equipment after 4 years using Sinking fund method
    at 4% interest.
    2. An engineer bought an equipment for P500,000. Other expenses including
    installations amounted to P50,000. At the end of its estimated useful life of 10 years,
    the salvage value will be 10% of the first cost. Using Sinking fund Method, what is the
    book value after 6 years? Use sinking fund rate of 3%.

    3. The initial cost of a piece of construction equipment is $3,000,000 having a useful life
    of 10years. The estimated salvage value of the equipment at the end of the useful
    life is $450,000 Tabulate the annual depreciation amounts and the book value of the
    equipment at the end of each year. using Sinking fund method, if interest rate is 8.2
    % per year.

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