Bulma Company provided you the following information in relation to its properly, plant, and equipment account: January 1 December 31 Machinery P135,000 P150,000 Accumulated depreciation 50,000 45,000 Additional information: Depreciation is 10% per annum. As a company policy, newly acquired assets are depreciated for a whole year at the year of purchase and no depreciation is N provided for assets disposed at the year of disposal. • At the start of the year, a fully depreciated machine without scrap value was sold for P5,000, at the same date, a new machine was acquired. How much is the historical cost of the machine sold? (no peso sign, no comma, whole number only)
Bulma Company provided you the following information in relation to its properly, plant, and equipment account: January 1 December 31 Machinery P135,000 P150,000 Accumulated depreciation 50,000 45,000 Additional information: Depreciation is 10% per annum. As a company policy, newly acquired assets are depreciated for a whole year at the year of purchase and no depreciation is N provided for assets disposed at the year of disposal. • At the start of the year, a fully depreciated machine without scrap value was sold for P5,000, at the same date, a new machine was acquired. How much is the historical cost of the machine sold? (no peso sign, no comma, whole number only)
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 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...
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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.
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Transcribed Image Text:Bulma Company provided you the following information in relation to its properly,
plant, and equipment account:
January 1
December 31
Machinery
P135,000
P150,000
Accumulated depreciation
50,000
45,000
Additional information:
Depreciation is 10% per annum. As a company policy, newly acquired assets are
depreciated for a whole year at the year of purchase and no depreciation isA
provided for assets disposed at the
year
of disposal.
• At the start of the year, a fully depreciated machine without scrap value was sold
for P5,000, at the same date, a new machine was acquired.
How much is the historical cost of the machine sold? (no peso sign, no comma, whole
number only)
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