1. A plant asset was purchased for P19,000 on January 1, 2011 with a residual value and useful life of five years.In 2014, the total useful life is re-estimated to be seven years and the estimated salvage value is assumed tobe zero. Sum of years' digits depreciation is used.What is the depreciation expense in 2014?O a) P2,340O b) P2,160O c) P1,350O d) P1,210

Calculation of depreciation :- Some of Year Method = n(n+1)/2 Where n = number of years So SYD =…

A plant asset was purchased for P19,000 on January 1, 2011 with a resio n 2014, the total useful life is re-estimated to be seven years and the es be zero. Sum of years' digits depreciation is used. What is the depreciation expense in 2014?

A plant asset was purchased for P19,000 on January 1, 2011 with a resio n 2014, the total useful life is re-estimated to be seven years and the es be zero. Sum of years' digits depreciation is used. What is the depreciation expense in 2014?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 3EB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

A plant asset was purchased for P19,000 on January 1, 2011 with a residual value and useful life of five years.
In 2014, the total useful life is re-estimated to be seven years and the estimated salvage value is assumed to
be zero. Sum of years' digits depreciation is used.
What is the depreciation expense in 2014?
O a) P2,340
O b) P2,160
O c) P1,350
O d) P1,210

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