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Straight Line & Sinking Fund Method

This document contains 10 problems involving calculating depreciation, book value, salvage value, and first cost of various assets using straight line and sinking fund methods of depreciation. Specific values are given for the cost, salvage value, interest rate, time period, and annual depreciation amount for each asset, and the user is asked to calculate missing values like book value, depreciation rate, or first cost based on the information provided.

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Nathan Dungog
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5K views2 pages

Straight Line & Sinking Fund Method

This document contains 10 problems involving calculating depreciation, book value, salvage value, and first cost of various assets using straight line and sinking fund methods of depreciation. Specific values are given for the cost, salvage value, interest rate, time period, and annual depreciation amount for each asset, and the user is asked to calculate missing values like book value, depreciation rate, or first cost based on the information provided.

Uploaded by

Nathan Dungog
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. A machine has a first cost of P45000 with an interest rate of 10% annually.

Expected salvage value after 8 years is P8000. Find the book value after 5
years using sinking fund method.
( Ans BV m=P 25,247.38 )

2. An asset is purchased for P350,00. The salvage value in 18years is P65,000/


what are the depreciation in the first three years using straight line method ?
( Ans D = P15,833.33 )

3. A machine has a first cost of P36,000 and a salvage value ofP4,000 after 8
years. Find the annual depreciation rate using straight line method.
( Ans D = P4,000 )

4. A machine has a first cost of P400,000 and a salvage value of P46,000 17


years from now. If the interest is 10%. Find the annual depreciation using
sinking fund method of depreciation.
( Ans D = P8731 )

5. A factory equipment has an initial cost of P175,000. Its salvage value after 8
years is P18,000. As a percentage of the initial cost, what is the straiglt line
depreciation rate of the equipment.
( Ans Depreciation Rate = 11.2% )

6. The annual depreciation of P25,000 has been reserve for a machine for a
machine using straight line for 10 years. If the first cost is P300,000,
determine the salvage value of the machine.
( Ans SV = P50,000 )

7. An equipment costs P15,000 with a salvage value of P800 at the end of 12


years. Calculate the annual depreciation by sinking fund method with 30%
interest.
( Ans D = P191.05 )

8. Water pipe has a first cost of P35,000 and has no salvage value after
20years, using sinking fund depreciation, determine the annual depreciation
for 20% interest.
( Ans D = 187.48 )
9. A gasoline engine has an annual depreciation of P13,000 for 15 years and
salvage value of P20,000. Using sinking fund depreciation with 15% interest.
Determine the first cost of the engine.
( Ans Fc = P638,545.34 )

10. A machine costs P15,000 was old as scrap after being used for 12 years. If
the scrap value was P650, determine the book value after 7years. (Straight
Line Method)
( Ans BV 7 =P 6629.17 )

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