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Exercise 14. Revision of depreciation A warehouse with a cost of P500,000 has an estimated residual value of P20,000, an estimated useful life of 40 years and is depreciated by the straight line method. (a) What is the amount of the annual depreciation? (b) What is the book value at the end of the twentieth year of use? (c) If at the start of the twenty-first year it is estimated that the remaining life is 15 years and that the residual value is P5,000, what is the depreciation expense for each of the remaining 15 years?

Exercise 14. Revision of depreciation A warehouse with a cost of P500,000 has an estimated residual value of P20,000, an estimated useful life of 40 years and is depreciated by the straight line method. (a) What is the amount of the annual depreciation? (b) What is the book value at the end of the twentieth year of use? (c) If at the start of the twenty-first year it is estimated that the remaining life is 15 years and that the residual value is P5,000, what is the depreciation expense for each of the remaining 15 years?

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter9: Long-term Assets: Fixed And Intangible
Section: Chapter Questions
Problem 9.12EX
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Exercise 14. Revision of depreciation A warehouse with a cost of P500,000 has an estimated residual value of P20,000, an estimated useful life of 40 years and is depreciated by the straight line method. (a) What is the amount of the annual depreciation? (b) What is the book value at the end of the twentieth year of use? (c) If at the start of the twenty-first year it is estimated that the remaining life is 15 years and that the residual value is P5,000, what is the depreciation expense for each of the remaining 15 years? Exercise 15. Adjusting entries for depreciation; effect of error On December 31, a business estimates depreciation on equipment used during the first year of operations to be P8,500. If the adjusting entry were omitted, which items would be erroneously stated on (1) the SCI for the year and (2) the SFP as of December 31?
Transcribed Image Text:Exercise 14. Revision of depreciation A warehouse with a cost of P500,000 has an estimated residual value of P20,000, an estimated useful life of 40 years and is depreciated by the straight line method. (a) What is the amount of the annual depreciation? (b) What is the book value at the end of the twentieth year of use? (c) If at the start of the twenty-first year it is estimated that the remaining life is 15 years and that the residual value is P5,000, what is the depreciation expense for each of the remaining 15 years? Exercise 15. Adjusting entries for depreciation; effect of error On December 31, a business estimates depreciation on equipment used during the first year of operations to be P8,500. If the adjusting entry were omitted, which items would be erroneously stated on (1) the SCI for the year and (2) the SFP as of December 31?
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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