PROBLEM 5-7 Computotion of Cost of Machine Acqutred and Sold Phosphorus Co. provided you the following information in relatian to its property, plant, and equipment account: Equlpment Accumulated depreciation Beginning 100,000 15,000 End 120,000 18,000 95 Scanned with CamScanner Additional Information: a) Depreciation Is 15% per annum. b) At the start of the year, Phosphorus Co. acquired an equipment and at the same time disposed of an equipment with a carrying amount of P25,000, accumulated depreciation of P15,000 for P35,000. Questions: 1. How much is the cost of the machine disposed? a P60,000 b P160,000 C P120,000 d. P40,000 2 How much is the cost of the machine acquired? a P60,000 b 160,000 c. PI20,000 d. P40,000
PROBLEM 5-7 Computotion of Cost of Machine Acqutred and Sold Phosphorus Co. provided you the following information in relatian to its property, plant, and equipment account: Equlpment Accumulated depreciation Beginning 100,000 15,000 End 120,000 18,000 95 Scanned with CamScanner Additional Information: a) Depreciation Is 15% per annum. b) At the start of the year, Phosphorus Co. acquired an equipment and at the same time disposed of an equipment with a carrying amount of P25,000, accumulated depreciation of P15,000 for P35,000. Questions: 1. How much is the cost of the machine disposed? a P60,000 b P160,000 C P120,000 d. P40,000 2 How much is the cost of the machine acquired? a P60,000 b 160,000 c. PI20,000 d. P40,000
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 9.17EX: Entries for sale of fixed asset Equipment acquired on January 8 at a cost of 168,000 has an...
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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:PROBLEM 5-7 Computotion of Cost of Machine Acqutred and Sold
Phosphorus Co. provided you the following information in relation to its
property, plant, and equlpment account:
Equipment
Accumulated depreciation
- Beginning
100,000
15,000
End
120,000
18,000
95
Scanned with CamScanner
Additional Information:
a) Depreciation Is 15% per annum.
b) At the start of the year, Phosphorus Co. acquired an equipment and the
same time disposed of an equipment with a carrying amount of P25,000,
accumulated depreciation of P15,000 for P35,000.
Questions:
1. How much is the cost of the machine disposed?
a. P60,000
b P160,000
C P120,000
d. P10,000
2 How much is the cost of the machine acquired?
a P60,000
b P160,000
c P120,000
d P10,000
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