Exercise 12. Straight-line depreciation A refrigerator used by a meat processor has a cost of P112,000, an estimated residual value of P18,000 and an estimated useful life of 8 years. What is the amount of the annual depreciation computed by the straight-line method?
Exercise 12. Straight-line depreciation A refrigerator used by a meat processor has a cost of P112,000, an estimated residual value of P18,000 and an estimated useful life of 8 years. What is the amount of the annual depreciation computed by the straight-line method?
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
ChapterA: Methods Of Depreciation
Section: Chapter Questions
Problem 2P: Use the information in Problem A-1 to solve this problem. Assume the delivery van is expected to...
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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:Exercise 12. Straight-line depreciation
A refrigerator used by a meat processor has a cost of P112,000, an estimated residual value of
P18,000 and an estimated useful life of 8 years. What is the amount of the annual depreciation
computed by the straight-line method?
Exercise 13. Partial-year depreciation
Sandblasting equipment acquired at a cost of P64,000 has an estimated residual value of P5,200 and
an estimated useful life of 6 years. It was placed in service on April 1 of the current fiscal year, which
ends on December 31. Determine the depreciation for the current fiscal year and for the following
fiscal year by straight-line method.
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