lOMoARcPSD|29935802

Review in Depreciation - Part 1

Engineering economy (Eastern Visayas State University)

Scan to open on Studocu

Studocu is not sponsored or endorsed by any college or university

Downloaded by Justin Grantos (justin.grantos@evsu.edu.ph)
 lOMoARcPSD|29935802

Review in Depreciation Q4. Construct the estimated useful life depreciation.

(Part 1) depreciation and of the equipment is 10 (Matheson’s Method)
book value table. years. The salvage A. P600,000
STRAIGHT LINE METHOD value is x% of the B. P100,000
Practice Problems first cost. Using the C. P300,000
1. A machine has an straight line method D. P900,000
initial cost of of depreciation, the 11. An earth moving
P50,000.00 and a Instruction: Choose the
book value at the end equipment that cost
salvage value of best answer.
of 5 years will be P90,000 will have an
P10,000.00 after 10 P291,500. What is the estimated salvage
years. 1. A machine costs P8,000
and an estimated life value of x? value of P18,000 at
Q1. What is the annual A. 0.2 the end of 8 years.
depreciation? of 10 years with a
salvage value of P500. B. 0.4 Using double-declining
Q2. What is the book C. 0.3 balance method,
value after 5 What is its book value
after 8 years using D. 0.1 compute the book value
years? 7. The initial cost of a and the total
Q3. What is the total straight line method?
A. P2,000.00 paint sand mill, depreciation at the
depreciation after including its end of the 5th year.
3 years? B. P2,100.00
C. P2,200.00 installation, is A. P21,357.42;
Q4. Construct a table P800,000. The BIR P68,642.58
of book values from D. P2,300.00
2. An asset is purchased approved life of this B. P15,830.34;
year = 0 to year = machine is 10 years P74,169.66
10. for P500,000.00. The
salvage value in 25 for depreciation. The C. P24,362.48;
DECLINING BALANCE METHOD years is P100,000.00. estimated salvage P65,637.52
What is the total value of the mill is D. P19,442.78;
2. A machine costing depreciation in the P50,000 and the cost P70,557.22
P720,000 is estimated first three years of dismantling is 12. An equipment cost
to have a book value using straight-line estimated to be P500,000 and has a
of P40,545.73 when method? P15,000. Using salvage value of
retired at the end of A. P45,000.00 straight-line P25,000 after its 25
10 years. Depreciation B. P46,000.00 depreciation, what is years of useful life.
cost is computed using C. P47,000.00 the annual Using Double Declining
constant percentage of D. P48,000.00 depreciation charge? Balance Method, What
the declining value. 3. A machine has an A. P75,500.00 will be the book value
Q1. What is the annual initial cost of B. P76,000.00 after 8 years?
rate of P50,000 and a salvage C. P76,500.00 A. P246,906.55
depreciation? value of P10,000 after D. P77,000.00 B. P217,412.43
Q2. What is the book 10 years. What is the 8. A unit of welding C. P256,609.44
value after 3 book value after 5 machine cost P45,000 D. P227,672.73
years? years using straight with an estimated life 13. An asset is purchased
Q3. What is the line depreciation? of 5 years. Its for P120,000.00. Its
depreciation charge A. P30,000.00 salvage value is estimated life is 10
after 4 years? B. P31,000.00 P2,500. Find its years, after which it
Q4. What is the total C. P30,500.00 depreciation rate by will be sold for
depreciation after D. P31,500.00 straight-line method. P12,000.00. Find the
6 years? 4. The cost of equipment A. 18.89% depreciation for the
is P500,000 and the B. 19.21% second year using the
DOUBLE DECLINING BALANCE C. 19.58% sum of years digit
cost of installation
METHOD D. 19.89% method.
is P30,000. If the
salvage value is 10% 9. A radio service panel A. P17,578.13
3. A machine has a first truck initially cost B. P17,412.43
of the cost of
cost of P140,000 and a P560,000. Its resale C. P17,344.67
equipment at the end
life of 8 years with a value at the end of D. P17,672.73
of years, determine
salvage value of the 5th year of the 14. A certain office
the book value at the
P10,000 at the end of useful life is equipment has a first
end of the fourth
its useful life. Using estimated at P150,000. cost of P20,000 and a
year. Use straight-
Double Declining By means of declining salvage value of P1000
line method.
Balance Method, balance method, at the end of 10
A. P146,320.50
Q1. What is the book determine the years. Determine its
B. P146,000.00
value on the 3rd depreciation charge book value at the end
C. P146,230.50
year? for the second year. of 6 years using sum
D. P146,023.50
Q2. What is the A. P99,658.41 of years digit method.
5. An asset is purchased
depreciation charge B. P99,128.45 A. P4,560
for P9,000.00. Its
in the 4th year? C. P99,290.00 B. P4,455
estimated economic
life is 10 years after D. P99,378.45 C. P5,356
SUM OF YEARS DIGIT METHOD
which it will be sold 10. A machine having a D. P4,230
4. An asset is purchased for P1,000.00. Find certain first cost has 15. A certain equipment
for P9,000. Its the depreciation in a life of 10 years and costs P7,000 has an
estimated economic the first three years a salvage value of economic life of n
life is 10 years after using straight line 6.633% of the first years and a salvage
which it will be sold method. cost at the end of 10 value P350 at the end
for P1,000. Using A. P2,400.00 years. If it has a of n years. If the
Q1. Find the book value B. P2,412.34 book value of P58,914 book value at the end
during the 3rd year. C. P2,250.00 at the end of the 6th of 4 years is equal to
Q2. Find the D. P2,450.00 year, how much is the P2197.22, compute for
depreciation during 6. An engineer bought an first cost of the the economic life of
the 2nd year. equipment for machine if the the equipment using
Q3. Find the total P500,000. He spent an constant percentage of the sum of years digit
depreciation after additional amount of declining value is method.
4 years. P30,000 for used in the A. 10 years
installation and other computation for its B. 8 years
expenses. The C. 16 years
Downloaded by Justin Grantos (justin.grantos@evsu.edu.ph)
 lOMoARcPSD|29935802

D. 11 years

*** End ***

Downloaded by Justin Grantos (justin.grantos@evsu.edu.ph)