An asset was purchased for P1,000,000.00 to be retired at the end of 15 years with salvage value of P40,000. The annual operating cost was P180,000. Determine the capitalized cost of the asset if money is worth of 8%. Capitalized Cost = First cost + Q + X Q- PW (P/Α, i, k) S X = (1 + i)* – 1

An asset was purchased for P1,000,000.00 to be retired at the end of 15 years with salvage value of P40,000. The annual operating cost was P180,000. Determine the capitalized cost of the asset if money is worth of 8%. Capitalized Cost = First cost + Q + X Q- PW (P/Α, i, k) S X = (1 + i)* – 1

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 1RE: Susquehanna Company purchased an asset at the beginning of the current year for 250,000. The...

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Question

5. An asset was purchased for P1,000,000.00 to be retired at the end of 15 years
with salvage value of P40,000. The annual operating cost was P180,000.
Determine the capitalized cost of the asset if money is worth of 8%.
Capitalized Cost = First cost + Q + X
Q = PW(P/A, i, k)
X =
(1 + i)k – 1

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