Riles Truckers, Inc. acquired a heavy road transporter on January 1, 2014 at a cost of P10 million.  The estimated useful life is 10 years.  On January 1, 2020, the power train requires replacement, as further maintenance is uneconomical due to the off-road time required.  The remainder of the vehicle is perfectly roadworthy and is expected to last for the next four years.  The cost of the new power train is P4.5 million.   Assuming that the original cost of the power train is P3 million, the total depreciation expense in 2020 is a. P2,200,000 b. P1,150,000 c. P1,825,000 d. P1,450,000

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.