1. A machine costs Php70000.

00 and an estimated life of 10 years with a salvage value of

Php500.00. What is the book value after 7 years using straight line method?
A. Php24500.00
B. Php25500.00
C. Php26500.00
D. Php27500.00
(ECE BOARD EXAM, 2010) Answer: A
2. A company purchases an asset of Php15000.00 and plans to keep it for 20 years. If the
salvage value is zero at the end of 20 years, what is the depreciation in third year? Use sum-
of-years digit method.
A. 1256
B. 1266
C. 1276
D. 1286
(ECE BOARD EXAM, 2010) Answer: D
3. A machine is purchased for Php55000.00. The salvage value in 20 years is Php10000.00.
What is the depreciation method in the first 3 years using straight line method?
A. 6750
B. 6850
C. 6570
D. 6580
(ECE BOARD EXAM, 2010) Answer: A
4. An asset has an initial cost of Php15000.00 and a salvage value of Php1000.00 after 10
years. What is the book value after 5 years using straight line depreciation?
A. Php7000.00
B. Php8000.00
C. Php9000.00
D. Php10000.00
(ME BOARD EXAM, 2012) Answer: B
5. An asset is purchased for Php50000.00. Its estimated life is 10 years after which it will be
sold for Php12000.00. Find the depreciation for the first year using sum-of-years digit
method.
A. 6099.1
B. 9960.1
C. 9690.1
D. 6909.1
(ME BOARD EXAM, 2012) Answer: D
6. A telecommunication company purchased an equipment for Php35000.00 and paid
Php1500.00 for freight and delivery charges to the job site. The equipment has a normal life
of 10 years with a trade-in value of Php5000.00 against the purchase of a new equipment at
the end of life. Determine the annual depreciation cost by the sinking fund method.
Assume interest at 6.5% compounded annually.
A. Php2453.00
B. Php3668.00
C. Php4215.00
D. Php5956.00
(ME BOARD EXAM, 2012) Answer: B
7. Guballa Corporation bought a machine for Php200000.00 and used it for 10 years, the life
span of the equipment. What is the book value of the machine after 5 years of use? Assume
a scrap value of Php20000.00. Use double declining balance method.
A. Php43648.00
B. Php59425.00
C. Php65536.00
D. Php70923.00
(CE BOARD EXAM, 2011) Answer: C
8. A machine costs Php8000.00 and an estimated life of 10 years with a salvage value of
Php500.00. What is its book value after 8 years? Use straight line method.
A. Php1000.00
B. Php1800.00
C. Php2000.00
D. Php3000.00
(CE BOARD EXAM, 2011) Answer: C
9. A VOM has a current selling price of Php400.00. If its selling price is expected to decline at a
rate of 10% per annum due to obsolescence, what will be its selling price after 5 years?
A. Php96.60
B. Php126.60
C. Php236.20
D. Php326.20
(CE BOARD EXAM, 2011) Answer: C
10. A plant bought a machine for Php200000.00 and used it for 10 years, the life span of the
equipment. What is the book value of the machine after 5 years of use? Assume a scrap
value of Php20000.00. Use double declining balance method.
A. Php43648.00
B. Php59425.00
C. Php65536.00
D. Php70923.00
(ChE BOARD EXAM, 2013) Answer: B
11.
11. De Guia Corporation makes it policy that for every new equipment purchased, the annual
depreciation cost should not exceed 20% of the first cost at any time without salvage value.
Determine the length of service life necessary if the depreciation used is the sum-of-years
digit method.
A. 6 years
B. 8 years
C. 9 years
D. 11 years
(ChE BOARD EXAM, 2013) Answer: B
12.
12. A telecommunications company purchased a microwave radio equipment for 6 million
pesos. Freight and installation charges amounted to 4% of the purchased price. If the
equipment will be depreciated over a period of 10 years with a salvage value of 8%,
determine the depreciated cost during the fifth year using sum-of-years digit method.
A. Php369299.01
B. Php626269.10
C. Php426929.10
D. Php929629.01
(ChE BOARD EXAM, 2013) Answer: B
13.
13. A machine costs Php8000.00 and an estimated life of 10 years with a salvage value of
Php500.00. What is its book value after 8 years using straight line method?
A. Php2000.00
B. Php2100.00
C. Php2200.00
D. Php2300.00
(ECE BOARD EXAM, 2009) Answer: A
14. Tapawan Corporation makes it a policy that for any new equipment purchased, the annual
depreciation cost should not exceed 20% of the first cost at any time with no salvage value.
Determine the length of service life necessary if the depreciation used is sum-of-years digit
method.
A. 7 years
B. 8 years
C. 9 years
D. 10 years
(ECE BOARD EXAM, 2009) Answer: C
15.
15. An asset is purchased for Php9000.00. Its estimated economic life is 10years after which it
will be sold for Php1000.00 Find the depreciation in the first three years using sum-of-years
digit method.
A. Php3279.27
B. Php3927.27
C. Php3729.27
D. Php3792.72
(ECE BOARD EXAM, 2009) Answer: B
16. A company purchases an asset for Php10000.00 and plans to keep it for 20 years. If the
salvage value is zero at the end of 20 th year, what is the depreciation in the third year? Use
sum-of-years’ digit method.
A. Php1000.00
B. Php857.00
C. Php937.00
D. Php747.00
(ME BOARD EXAM, APRIL 1998) Answer: B
17. A Telephone company purchased a microwave radio equipment for Php6000000.00, freight
and installation charges amounted to 4% of the purchased price. If the equipment will be
depreciated over a period of 10 years with a salvage value of 8%, determine the
depreciation cost during the 5th year using sum-of-years’ digit method.
A. Php626269.10
B. Php622786.07
C. Php638272.08
D. Php627989.90
(ECE BOARD EXAM, APRIL 1999) Answer: B
18. An asset is purchased for Php9000.00. Its estimated life is 10 years after which it will be sold
for Php1000.00. Fin d the book value during the first year if sum-of-year’s digit depreciation
is used.
A. Php8000.00
B. Php6500.00
C. Php7545.00
D. Php6000.00
(ME BOARD EXAM, APRIL 1998) Answer: B
19. A corporation uses a type of motor truck which costs Php5000.00 with life of 2 years and
final salvage value of Php800.00. How much could the corporation afford to pay for another
type of truck of the same purpose whose life is 3 years with a final salvage value of
Php100.00. Money is worth 4%.
A. Php8450.66
B. Php7164.37
C. Php6938.24
D. Php9034.56
(CE BOARD EXAM, APRIL 1997) Answer: B
20. A company must relocate one of its factories in three years. Equipment for the loading dock
is being considered for purchase. The original cost is Php20000.00, the salvage value of the
equipment after three years is Php8000.00. The company’s rate of return on the money is
10%. Determine the capital recovery rate per year.
A. Php5115.00
B. Php4946.00
C. Php5625.00
D. Php4805.00
(ME BOARD EXAM, APRIL 1995) Answer: B
21. The initial cost of a paint sand mill, including its installation, is Php800000.00. The BIR
approved life of this machine is 10 years for depreciation. The estimated salvage value of
the mill is Php50000.00 and the cost of dismantling is estimated to be Php15000.00. Using
straight line depreciation, what is the annual depreciation charge and what is the book
value of the machine at the end of six years?
A. Php74500.00; Php340250.00
B. Php76500.00; Php341500.00
C. Php76500.00; Php342500.00
D. Php77500.00; Php343250.00
(ME BOARD EXAM, OCTOBER 1992) Answer: B
22. The cost of equipment is Php500000.00 and the cost of installation is Php30000.00. If the
salvage value is 10% of the cost of equipment at the end of 5 years, determine the book
value at the end of the fourth year. Use straight line method.
A. Php155000.00
B. Php140000.00
C. Php146000.00
D. Php132600.00
(CE BOARD EXAM, NOVEMBER 1997) Answer: B
23. An asset is purchased for Php500000.00. The salvage value in 25 years is Php100000.00.
What is the total depreciation in the first three years using straight line method?
A. Php46000.00
B. Php24000.00
C. Php32000.00
D. Php16000.00
(ME BOARD EXAM, APRIL 1998) Answer: B
24. A machine has an initial cost of Php50000.00 and a salvage value of Php10000.00 after 10
years. What is the book value after 5 years using straight line depreciation?
A. Php35000.00
B. Php25000.00
C. Php15500.00
D. Php30000.00
(ME BOARD EXAM, APRIL 1998) Answer: B
25. An equipment costs Php10000.00 with a salvage value of Php500.00 at the end of 10 years.
Calculate the annual depreciation cost by sinking fund method at 4% interest.
A. Php791.26
B. Php950.00
C. Php971.12
D. Php845.32
(ChE BOARD EXAM, APRIL 1999) Answer: B
26. A machine costing Php720000.00 is estimated to have a book value of Php40545.73 when
retired at the end of 10 years. Depreciation cost is computed using a constant percentage
using a constant percentage of the declining book value. What is the annual rate of
depreciation in percentage?
A. 28%
B. 25%
C. 16%
D. 30%
(CE BOARD EXAM, NOVEMBER 1995) Answer: B
27. A machine costing Php45000.00 is estimated to have a book value of Php4350 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 percentage?
A. 33.25%
B. 32.25%
C. 35.25%
D. 34.25%
(CE BOARD EXAM, MAY 1996) Answer: B
28. A unit of welding machine costs Php45000.00 with an estimated life of 5 years. Its salvage
value is Php2500.00. Find its depreciation rate by straight line method.
A. 17.75%
B. 19.88%
C. 18.89%
D. 15.56%
(ME BOARD EXAM, APRIL 1992) Answer: B
29. A machine has an initial cost of Php50000.00 and a salvage value of Php10000.00 after 10
years. Find the book value after 5 years using straight line depreciation.
A. Php12500.00
B. Php30000.00
C. Php16400.00
D. Php22300.00
(EE BOARD EXAM, APRIL 1997) Answer: B
30. Amado Corporation makes it policy that for any new equipment purchased, the annual
depreciation cost should not exceed 20% of the first cost at any time with no salvage value.
Determine the length of service life necessary if the depreciation used is sum-of-years’ digit
method.
A. Php5115.00
B. Php4946.00
C. Php5625.00
D. Php4805.00
(ECE BOARD EXAM, NOVEMBER 1998) Answer: B