A consortium of international communications companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total cost of P1,185,035. Freight and installation charges at 11.332% of the above total contract price with salvage value of 12.877% of the first cost. The fiber optic cable is estimated to last for 51 years. Using the Sum of the Years-Digits method of depreciation, determine the following: A.Depreciation on the 25th year. B.Total depreciation after 30 years. C.Book value after 35 years. (Please provide detailed solution not in excell, thank you in advance)

A consortium of international communications companies contracted for the purchase and installation of a fiber optic cable linking two major Asian cities at a total cost of P1,185,035. Freight and installation charges at 11.332% of the above total contract price with salvage value of 12.877% of the first cost. The fiber optic cable is estimated to last for 51 years. Using the Sum of the Years-Digits method of depreciation, determine the following: A.Depreciation on the 25th year. B.Total depreciation after 30 years. C.Book value after 35 years. (Please provide detailed solution not in excell, thank you in advance)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PB: Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are...

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A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.
Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
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