On January 1, 1978, the purchasing engineer of a cement company purchased a new machine at a cost of Php 140,000. Depreciation has been computed by the SLM based on an estimated useful life of five years and scrap value of Php 12,800. On January 1, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of the machinery were performed) at a cost of Php 30,400. and because of the thorough going nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful was four years from January 1981. Determine the annual provisions for depreciation for the years 1978 to 1980 and the adjusted provision for depreciation on December 31, 1981. Assume payment in cash for the machine and extraordinary repairs.
On January 1, 1978, the purchasing engineer of a cement company purchased a new machine at a cost of Php 140,000. Depreciation has been computed by the SLM based on an estimated useful life of five years and scrap value of Php 12,800. On January 1, 1981, extraordinary repairs (which were almost equivalent to a rebuilding of the machinery were performed) at a cost of Php 30,400. and because of the thorough going nature of these repairs, the normal life of the machinery was extended materially. The revised estimate of useful was four years from January 1981. Determine the annual provisions for depreciation for the years 1978 to 1980 and the adjusted provision for depreciation on December 31, 1981. Assume payment in cash for the machine and extraordinary repairs.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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On January 1, 1978, the purchasing engineer of a cement company
purchased a new machine at a cost of Php 140,000. Depreciation has been
computed by the SLM based on an estimated useful life of five years and
scrap value of Php 12,800. On January 1, 1981, extraordinary repairs (which
were almost equivalent to a rebuilding of the machinery were performed) at a
cost of Php 30,400. and because of the thorough going nature of these
repairs, the normal life of the machinery was extended materially. The revised
estimate of useful was four years from January 1981. Determine the annual
provisions for depreciation for the years 1978 to 1980 and the adjusted
provision for depreciation on December 31, 1981. Assume payment in cash
for the machine and extraordinary repairs.
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