A contractor imported a bulldozer paying P650k to the manufacturer, freight expense amounted to P30k, permits & other exp P25k. If the contractor estimates the life of the bulldozer to be 25 years with salvage value of P50k, determine the year 15 depreciation and its corresponding Book value at the end of 15 years using Sinking fund at 10% and SYD Method.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
A contractor imported a bulldozer paying P650k to the manufacturer, freight expense amounted to P30k, permits & other exp P25k. If the contractor estimates the life of the bulldozer to be 25 years with salvage value of P50k, determine the year 15
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