Travis Co. decided set up a corporation issuing 5000 shares of P20 par ordinary stocks trading at P25 in the stock market in exchange for an equipment with a fair value of 150,000. Similarly, Travis Co. has a similar equipment which it bought for 160,000. The equipment is depreciated over 5 years using the straight-line method and it has no salvage value. How much is the depreciation on the first year?
Travis Co. decided set up a corporation issuing 5000 shares of P20 par ordinary stocks trading at P25 in the stock market in exchange for an equipment with a fair value of 150,000. Similarly, Travis Co. has a similar equipment which it bought for 160,000. The equipment is depreciated over 5 years using the straight-line method and it has no salvage value. How much is the depreciation on the first year?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 62IIP
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Travis Co. decided set up a corporation issuing 5000 shares of P20 par ordinary stocks trading at P25 in the stock market in exchange for an equipment with a fair value of 150,000. Similarly, Travis Co. has a similar equipment which it bought for 160,000. The equipment is depreciated over 5 years using the straight-line method and it has no salvage value. How much is the depreciation on the first year?
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