1. Spacek Company purchased @ machine at a cost of P635,000 on January 1, 2020. It was estimated thatthe machine would have a residual value of P3S,000. The estimated useful ie is 5 years, 60,000 service hours and 150,000 production units ‘Actual operations Service hours. Unit produced 2020 14,000 ‘34,000 202 13,000 32,000 2022 10,000 25,000 2023 1,000 29,000 2004 12,000 30,000 Prepare a depreciation table fr the following methods: 2, Straightline Amun een 5 pon 500 1Syes Year ‘Depreeianion | Cost ‘Recumulated — | Carrying Depreciation _| Amount 72020 35,000, 120,000 515 000, 2024 635,000, 240,000 395,000. 2022 (635,000, 360,000, 275,000. 2023. 635,000 480,000 155,000. 2024 635,000, ‘600,000, 35,000 ». Service hours Depreciation rate: 635,000 ~ 35,000 / 60,000 hrs Year Cost ‘Accumulated | Carrying Depreciation | Amount ‘Depreciation 2020 10x 14,000 1635,000| 140,000] 495,000 2023 10 13,000 '635,000| 270,000] 365,000] 72022 10 x 10,000 1635,000| 370,000] 265,000 2003. 10x11,000 '635,000/ 480,000| 155,000 2024 10-x 12,000 '635,000| 600,000 35,000) © Production method Depreciation rate 635,000 ~ 35,000 / 150,000 units Year Cost “Accumulated | Carrying Depreciation | Amount 2020 434,000, 1635,000/ 136,000] 499,000 2021 432,000 '635,000[ 264,000] 373,000] 2022 425,000, '635,000| 364,000] 271,000, 2023 428,000, '635,000| 480,000] 155,000] 202 ‘430,000 '635,000/ 600,000, 35,000)2. Hepburn Company purchased machinery fr PS70,000 on July 1, 2020 tis estimated that it \willnave 2 useful ife of 20 yeas, residual value of P20,000, production of 200,00 units and ‘working hours of 50,000. The entity used the machinery for 3,000 hours in 2020 and 5,000 hhouts in 2021. The machinery produced 18,000 units in 2020 and 22,000 units in 2021, Compute deprecation for 2020 and 2021, 2 Straight ine ‘Annual depreciation "570,000 20,000 710 years = 55,000 2020: 55,000. 6/12 mn Sas b. Working hours Depreciation rate :570,000-20,000 50,000 = 11/hr 12020: 11 x3,000 = 2022 :11.x5,00 «Output method Depreciation rate 570,000 ~20,000 7 200,000= 2.75 unit 12020 : 2.75 x 18,000. 2021 :2.75 x22,000. 3. At the beginning of current year, Streep Company acquired the following assets con Resuavaue Use fein years voce Sitoco Son ‘ Orc comet hoes tgocn b Sota uscoom 1008 5 Daler expen Some "Saco t a. comput the conpstedepecion te Sete peweaaie [Oem yasamt Ciuc [moore sewretion wang | 500 sya Spa 5 aoe Siang [neo —iommo| tooo {es Buiiag” | —sonc00, Ton 000] sno 53[ aon Batted sage “sopneo! soo] ‘sono i109 Toul aso on onto Composite rate : Total Annual depreciation / Tota cost 270,000 / 2,450,000 11.02%», Compute the composite life. Composite life =Total Depreciable Amount /Tatal Annual depreciation 10 / 270,000 B52 yrs «Prepare journal entry to record the depreciation forthe current year. Depreciation 270,000 ‘Accumulated depreciation 270,000 4. MacLaine Company owned a power plant which conslsteé of the following assets all acquired at the beginning of current year. cost Residual value Usetullifein years Building 6,200,000 100,000 20 Machinery 2,350,000 50,000 5 Equipment 1,030,000 30,000 Fry ‘a. Compute the composite rate. Co pe ome [aera Aa men [eee Sacason satay —| asco cool Sos! ——aal Seen Tne —| —Sssommo| —Soun —esotonn{——"s{ Song peste [Smo —somol —seereeat sel — sen ae ean S000 sia Composite rate 900,000 / 9,680,000 », Compute the composite life. Composite if 9,500,000 / 200,000 «Prepare journal entry to record the depreciation for the current year following the composite method, Depreciation 900,000 ‘Accumulated depreciation 900,000 1. Prepare journal entry to record the retirement ofthe machinery at the end of the fith year ‘assuming the proceeds from retirement amounts to P40,000, cash 40,000 ‘Accumulated depreciation 2,510,000 > Eos ius alge proceeds Machinery 2,550,000€@. Prepare journal entry to record the depreciation for the sith year following the composite method, 9,680 000 ~ 2,580,000 = 7,130,000 x93% Depreciation 663,090 ‘Accumulated depreciation 663,090 5. Field Company provided the following schedule of machinery Total cost Estimated Useful ite Residualvalue _inyears Machine A 330,000 50,000 20 Machine 8 200,000 20,000 15 Machine C 40,000 none 5 |What's the composite Ife ofthe assets? Cost RV Dep Amount [ue ‘Annual Depo. ‘Machine A 350,000) 50,000] 500,006) 20] 25,000) Machine B 200,000 20,000} 180,000 15 12,000) Machine C 40,000 ° 40,000 5 8,000| Total 720,000. 720,000) 5,000 Composite ite= 720,000 / 45,000 = 46's 6, Page Company use the composite method of depreciation based on a composite ate of 25%, At the beginning of 2020, te total cost of equipment was P5000, 000 with a total residual value of P600,000. The accumulated depreciation was P3,000,000 at that tim In January 2020, the entity purchased an equipment for P2,500,000 with no residual value, Atthe end of 2020, the entity sold an equipment with an original cost of Pt,000,000 and a residual value of P200,000 for P350,000. This asset was acquired on January 1, 2018. 1. What Is the depreciation for 20207 Equipment eg 5,000,000 2,800,000 | 3,000,000 > cash 350,000 Accumulated depn 650,000 End 6,500,000 Equipment 3,090,000 6,500,000 x 25% = 41625/0002, What is the gain or loss from the derecognition ofthe asset on December 31,2020? 5 Under the composite method, no gain or loss is recognized on the derecognition of asset. ‘Accumulated depreciation, 12/31/2020 : 3,000,000 ~ 650,000 + 1,625,000 = 3,975,000 Cost 6,500,000 AD 3.975,000 cA 2,525,000 7. Matlin Company revealed the following depreciation palcy on machinery. + The estimated useful life is five years #Thestraightline method is used. ‘On June 30, 2020, the entity sold for P2,300,000 a machine acquited in 2017 for 4,200,000. The ‘estimated residual value was P500,000. What amount of gatn on disposal should be recorded in 20207 cost 4,200,000 ‘SP _2,300,000 Accumulated depn cA 2,040,000, 42M =600T Gain 260,000 5 x3 2.160.000 carrying amount 2,040,000 "3 yrsis for 2017, 2018, 2019. No depreciation in the year of lsposal (2020) 18 Cher Company used straight line depreciation for the property plant equipment which consisted of the following at the end ofeach year: 2020 2021 lane 250,000 250,000 Building 41950,000 41,850,000 Machinery and equipment 6,500,000 6,950,000 ‘Accumulated depreciation 3,700,000 4,000,000 ‘The depreciation expense for 2020 and 2021 was P500,000 and P550,000, respectively. What amount was BI to accumulates depreciation during 2021 because of property, plant ancl equipment retrement?‘Accumulated depreciation Beg 3,700,000 epn 2021 550,000 End 4,000,000, 9. Foster Company acquired a machinery on April 12020, cost 3,200,000 Residual value 120,000 Estimated useful fe 8 years 1 Whats the depreciation for 2020 using sum of yeas’ cigits? 2, What isthe depreciation for 2021 using sum of years digits? SYD=8 [841] = 8(45) = 36 2 1,200,000-120,000 2020:8/36 x 080,000 x 9/12 2021:8/36 x 080,000 x 3/12 60,000 7/36 x 080,000 x 6/2 = 157,500 3. What i the depreciation for 2020 using double declining balance? 4, What Is the depreciation for 2021 using double dectning balance? Under double decining balance method, AVIs ignored. 100% /8 = 125% > straghtiine rate a 25% > double decning ate 2020 125% x 1.200000 x9/12 = 935/606 122.000) 2021; 25% x 975,000 243,75010. On January 1, 2020 Tandy Company purchased a new machine for P4,000,000. The new machine has an estimated useful fe of eight years and the residual value was estimated to be 400,000. Depreciation was computed on the sum of the years’ gts method ‘What isthe carrying amount of the machine on December 31,2021? ‘SYD=8 [B+ =B(A5} = 36 z 4M~400T 4,000,000 cost 2020 : 8/35 x 3,600,000 800,000 2021 : 7/36 x 3,600,000 = 700,000 1,500,000 AD cA ‘Accumulated depreciation can also be computed this way 15/36 x 3,600,000 = 1,500,000 11. On January 1, 2018, Bates Company acquired equipment to be used in the manufacturing ‘operations. The equipment has an estimated useful life of 10 years and an estimated residual value of P50,000. The depreciation applicable to this equipment was for 2020 ‘computed under the sum of years” digits method What was the acquisition cost ofthe equipment? svo= 10 Gos3) = 10/85) =55 2 201s : 10/55 2019: 9/55, 2020: 2/ss x HSs005 = HAUG ‘hiss the depreciable amount, Therefore, CCost= Depreciable amount + RY 650,000 + 50,000, [Whats the carrying amount of the equipment on 12/31/2020? 10/55 9/35 8/ss 27/85 x1,650,000 = 810,000 > accumulated depreciation cost 1,700,000, aD _‘a10.000 A 880,00012, On April 1, 2020, Thompson Company purchased new machinery for P3,000,000. The machinery hasan estimated usefl if of Five yeas and depreciation Is computed by the sum of ‘years cigits method, ‘Whats the accumulated depreciation ofthe machinery on March 31, 20222 SyD=5 54) = 5(3) 2 3M-0 2020:5/35 x 3,000.00 » 9/12 = 780,000 2021 :5/15 x3,000,000 x3/12 = 250,000 44/45 «3,000,000 x9/12 = 600,000 850,000 2022 :4/25 x 3,000,000 x 3/12 = 200,000 1,800,000 or 41.2020 to 331.2021 ; 5/15 x 3,000,000 = 1,000,000, 41.2021 to 331.2022 : 4/15 x 3,000,000 = "800,000 13. Hunter Company takes @ ‘An asset was acquired in 2017 cost 4,100,000 Residual value 200,000 ‘Accumulated depreciation ~ January 1, 2020 720,000 Estimated useful life 5 years Using the same method in 2017, 2018 and 2019, what depreciation should be recorded in 2020?Using straight line 144100.000= 200.000 5 x o3 $540,000 > not equal to 720,000 (2017-2019) STRAIGHT LINE is NOT USED. Using s¥O SYD = 5 (SH) = 5(3) = 15 2 1.4M-200T 2017 5/15 poe: 4/35 2018: 3/35 12/35 x 900,000 = 720,000 equal to 720,000 Accum Depn given ; Thus, SYD i USED. 2020: 2/35 x 900,000 ‘Whats the depreciation expense n 2023 ? 2021: 1/15 x 900,000 = 60,000 [Whats the carrying amount on 12/31/2021? cost 1,100,000 “AD 900,000 a 200,000 -> equal tothe AV 414, Lange Company purchased equipment which was Installed and put Into service January 1, 2020,at a total cost P1,280,000. Residual value was estimated at PB0,000. The equipmentisbeing, depreciated over eight years by the double declining balance method. What amount of depreciation should be recorded for 20217 Under double decining balance method, RVs ignored: 100% / 8= 12.5% > straight line rate x2 25% > double declining rate 2020 :25% x1,280,000 = 320,000 320,000) 2021 :25% x 960,000 = 240,000 15, On January 1, 2020, Sarandon Company acquired an equipment to be used in operations ‘The equipment had 2 useful life of & years and residual value of P300,000. The depreciation ‘applicable to the equipment was P900,000 for 202% computed under the double declining balance method, What was the acquisition cost of the equipment?Under DDB method, AVis ignored 100 %/ 2.5% > straight line rate x2 25% > double dectning rate 2020: 25% : ( ) 2021 :25% x = 900,000 ‘This isthe decining balance after deducting 25 % of cost; ‘Therefore, 3.6 milion represents 75% Cost is 3,600,000 / 75% = §4800,000 Tocheck 2020:25%x 800,000 = 1,200,000 20:25 HBIBON 500,000 16, McDormand Company showed the folowing schedule of depreciable assets on January 2, 2020. Assets Cost Accumulated Acquisition Depreciation date av a 4,000,000 2,560,000 2018 400,000 8 2,000,000 1a40,000 2017 200,000 c 2,800,000 1,344,000 2017 $560,000, Tet ha ES ‘Asset C was sold for P1,700,000 on June 30, 2020. (Asset Alls depreciated under the double ‘declining method.2. What i the depreciation of Asset 8 for 2020 assuming same method in prior years? if straight line is used, accumulated depreciation Is 2,000,000 ~ 200,000 5 x3 080,000 > not equal to 1,440,000 (2017-2018), straight ine is NOT used IfSYD Is used, SYD=5 (5+ = 5(3) = 15 2 2017 5/15 ros : 4/15 2019 : 3/15 12/15 x 1,800,000 = 1,440,000 OK SYD Is used for Asset B 2020: 2/15 x 1,800,000 = 2405000 3. What isthe gain on sale of Asset C? I straight line is used, accumulated depreciation is. 2.00,000= 360.000 5 x3 1,344,000 OK straight ine is used (2017 to 2018) cost 2,800,000 sp 1,700,000 ‘Accum depn 1,344,000 * CA 1,456,000 Carrying amount 1,456,000 Gain *no depreciation is recognized in 2020, the year of disposition 17. Hunt Company purchased equipment on January 1,2020 for P5,000,000, The equipment had ‘an estimated 5-year useful life, The accounting policy for S-year assets isto use the 200% double declining balance method for the fist two years of the asset's ife and then switch to straight line deprecation ‘On December 31, 2022, what amount should be reported as accumulated depreciation?100% /5=20% > straightline rate x2 40% > double declining rate DDB for "2 years 5,000,000. cost 2020: 40% x 5,000,000 = 2,000,000 (2,000,000) 021: 40% x 3,000,000 = 1,200,000 3,200,000 AD 41,800,000 cA 2022 (3% year) use straight ine 11.800,000-0 3 600,000 ‘Accumulated depreciation 2020 & 2021, 3,200,000 2022 500,000 LBsoo00 18, Paltrow Company purchased a machinery on January 1, 2027 for P7,200,000. The machinery had useful fe of 10 years with no residual value and was depreciated using the straight line ‘method. In 2020, a decision was made to change the depreciation method from straight line to ‘sum of years digits. The estimate of useful if and residual value remained unchanged. ‘Whats the depreciation for 20207 ‘Straight line in 2037 to 2018 7,200,004 30 x 3 = 2,160,000 Cost 7,200,000 AD 2/160,000 cA $040,000, 10-3 7 syo=7 (741) = 7 @) = 28 2 5.04M-0 2020 :7/28x5,040,000_= 1,260/000 19. On Januaty 1, 2018, Swank Company purchased for P2,400,000 a machine with 2 useful if often yearsand no residual value. The machine was depreciated by the double declining balance method. The entity changed tothe straight ie method on January 1, 2020 What isthe depreciation for 20207DDB from 2018 02019, 1005 / 10 = 10% straight line rate x2 20% > double declining rate 2,400,000 Cost 364,000 AD 1,536,000 CA Use straight line starting 2020 10-2=8 yrs remaining life 20. On January 1, 2020, Roberts Company purchased personal computes for P6,000,000, The ‘managementestimated that the computers would last approximately years with residual value ‘of 600,000. The entity used the double declining balance method. During January 2021, the management realized that technological advancement had made the computers virtually ‘obsolete and proposed changing the remaining useful fe to2 year. What amount of depreciation should be recognized for 2021? 50% > double declining rate 2020: $0%%6,000,000 = 3,000,000 3,000,000 3,000,000 4 o 332 100 %/2 2021 : 100% «3,000,000 = 3,000,000 113,000,000 is deducted from the carrying amount of 3,000,000 as of 12/31/2020, the Carrying amount on 12/31/2021 would have been 0. However, the CA should not fall below Siooocc0~soo.cco mv = 2aab.0021. Berry Company purchased a machine on January 1, 2017 for P3,760,000. The machine was ‘estimated to have a useful life of five years and a residual value of 240,000, The entity used the ‘um of years’ dlgits method af depreciation. At the beginning of 2020, the entity determined that the total useful Ife of machine should have been four yeers and the residual 82,000. JWhat amount should be recorded as depreciation for 2020? ispptagneyny should be sscorde 2 3.760,000-240,000 2ou7 s/s, 2o1e-4715, 2019 3/15, 12/15. x 3.520000 = 2,816,000 > accumulated depn as of 12/31/18 cos 3,760,000 30 Zzis.000 carpus 544,000 54 wa” 4) 2 1 revised remaining fe RevisedS¥O: 2 stl = aay =1 944,000. 352,000, 2o20:4/1 x $92,900 592,000 22. Kidman Company acquired a machine on January 1, 2018 for P10,000,000. The machine hac ‘an 8-year useful life with aP1,000,000 residual value and was depreciated using the sum of years! dlipits method. In January 2020, the entity estimated thatthe asset's useful life fom the acquisition should have been 6 years and the residual value Is P400,000. Whats the accumulated depreciation on December 31, 2020? sO -8 su = ams) ~ 36 2 2018 9/36 2013: 7/36 15/36 9,000,000 = 3,750,000 > ADasof 12/23/19 6.250.000 cA ase ao 6 # > revised remaining if Revised YO :4 Hat = 425) = 20 2020: 4/10% 5,850,000 = 2,340,000 Das of 12/31/2019 3,750,000 + Dep 2020 200 AD as of 12/31/2020 6,080,000 1 date of23, Theron Company provided the fllawing information an January 1, 2020: Vehicle cost 5,000,000 Useful fe in years 5 Useful fe in miles 100,000 Residual value 1,000,000 Actual miles driven 2020 30,000 2o21. 20,000 2022 45,000 1 Whats the depreciation for 2022 using the SYD method? Sy: 5 [5t3) = 5/3) = 15 2 5M-1M 2020: 5/15 port: a/is, 2022: 3/15x 4M 800,000 2, What Is the accumulated depreciation on December 31, 2021 using the double declining balance method? TOONS = 20% > sraightline rate 42 405% > double decining rate 2020 : 40% x5,000,000 = 2,000,000 2,000,000), 2021 : 40% x 3,004 200,009 '3,200,000 > Accum Depn as of 12/31/21 3. What Is the accumulated depreciation on December 31, 2022 using the miles driven? Depreciation rate:SM=1M 1007 40/ mile Miles driven 2020 : 30,000 2021 : 20,000 2022 15,000 165,000 «40 =(9)600)000 -> Accum Depn 12/31/2224. Witherspoon Company used the Invefit@ry meth@d to account for numerous small tools. At ‘the beginning of current year, balance of the tools account was 140,000. The folowing transactions occurred with respect tothe small tools during the current year ‘Acquisitions at cost March 31 40,000 duly 31 20,000 Sale of used tools at salvage value on December 31 4,000 Inventory of small tals on December 31, at cost 180,000 Prepare journal entries to record the transactions related tothe tools account 300 B/L Tools 0,000 cash 40,000 3/31 Tools 20,000 cash 20,000 wAL Cash 4,000 Tools 4,000 Tools eg 140,000 ~ 0,000 20,000 4,000 396,000 46,000 Depreciation 46,000 | Tots 46,000 end 150,000 25, Mirren Company used a hand tool n the manufacturing activites. On January 1, 2020, there ‘are 800 of such tools on hand ata cost of P200 each, 160,000 ‘Acquistion and retirement during 2020 and 2021 are: Retirement and Estimated value Acquison and cost Tetirement proceeds of tools at year end 2020. 400.@ P300 120,000 300.@ P50 15,000 200,000 2021 900 @ P400 360,000) 700@ P70 49,000 309,000 Retirement may be assumed to be ona first-in, first-out bass Prepare journal entries for 2020 and 2021 using ESPEN, FESS Inventory method of depreciation,2020 Tools 120,000 ash 120,000 cash (300 P50} 15,000 Depreciation “Tools (300x200) 69,000 -> 300 units from beginning balance were retired Ending balance of tls: 160,000 + 120,000 ~ 60,000 = 220,000 2023 ‘cash 360,000 cash (70070) 49, 200 Depreciation 42,000 “Tools * 160,000 From 2020 beg. balance 500x200 100,000 From 2020 acquisition 200% P300 ‘60,000 160,000 - cost of tools retired Ending balance of tools : 220,000 + 260,000 ~ 160,000 = 420,000 Replacement method 2020 Tools (200* x 300), 30,000 > *400-300. Depreciation (300x300) OG {Cash (400 x 300) 120,000 Cash (300 x P50) 15,000 Depreciation Therefore, Depreciation in 2020s BBB > 20,00 less 15,000 Balance of Tools at ver end : 160,000 + 30,000 = 190,000 2021 “Too's(200* x 400} 80,000 > *900-700= 200 Depreciation (700x400) 1508 ‘cash (900 x P400) 360,000 cash (700 x P70) 49,000 Depreciation ‘Therefore, Depreciation in 2021 i BBB > 260,00 tess 29,000 Balance of Tools at year-end : 190,000 + 80,000 = 270,000,Fools (400x200) 120,000 cash (200% 30) 35,000 Retirement proceeds 445.000) ‘vs Est value at year end 200,000 ‘Tools _(900%P400) 360.000 cash 00x70), 49,000 ‘Requisition 460,000 ‘Retrement proceeds sca, ve Ext value at year end 250.000 Depreciation 162,000 26. Atte beginning of current year, Cotillard Company reported the following property, plant and equipment and accumulated depreciation: ‘Accumulated cost depreciation land 350,000 : Land improvement 180,000 45,000 Building 4,500,000 1,050,000 Machinery and equipment 41,160,000 405,000 Automobile 41800,000 1,344,000 Land improvements ~ Straight line, 15 years. Building - 150% deciining balance, 20 years Machinery and equipment ~ Straight ine ten years. Automobiles ~ 150 % declining balance, three years. ‘© On January 1, machinery and equipment were purchased at a total invoice cast 260,000, which included a P 10,000 charge for freight. Installation cost ofP 40,000 was incurred. ‘© On June 30, a machine purchased for PG0,000 two years ago was sold for P36,000, ‘+ On December 31, the entity purchased @ new automobile for P460,000 cash and trade Ii ofan automobile purchased for P540,000 three years ago. The new automobile has 2 cash price of 570,000,Determine the following forthe current year: 1. Depreciation of land improvements 15 12,900 2 Depreciation of builng TOK /20 = 5% > sraghtline rate nas 7.5% > 190% declining rote est 500,000 aD 4.980.009 cA 3,450,000 75% x 3,450,000 = 258780 2 Depreciation of machinery and equipment 1 260000 60,000) > cost of machine sold on une 30, 4,100,000 400.0009 10 : 110,000 1 Depn of machine sold ian 1 to June 30) 50.0000 10x 6/2 3,000 Depn of machine acquired this year 3000000 10 - — 20.000 Total depreciation of machinery and eqpt __ 143/000 1 Depreciation of automabiee cost 1800000 AD 4344000 o~ “56,000 so% x 456,000 = 338/00 ore: tere sno depreciation expense yet or automebil acquired vie tredein on December a127. At the beginning of current year, Winslet Company provided the following: ‘Accumulated cost depreciation lang 875,000, Building 7,500,000 11,644,500 Machinery and equipment 2,250,000 635,000 Buliding - double declining balance , 25 years Machinery and equipment ~ Straight line, 10 years Land improvements ~ Straight line + On January 1, a plant facility consisting of land and building was acquired from another entity in exchange for 25,000 shares of DiCaprio Company. On this date, the share had a ‘market price of P50. Current zonal values of land and building for property tax purposes are P150,000 and P00, 000, respectively On March 31, new parking lot, street and sidewalk atthe acquired plant facilty were completed ata total cost of P192,000. These expencitures had an estimated useful fe of 2 years. ‘& On July 1, machinery and equipment were purchased ata total invoice cast of P340,000. Additional cost of P10,000 for delivery and P50,000 for installation were incurred, ® On December 20, a machine with a cost of P170,000 and a carrying amount of P29,750 at date of elspostion was scrapped without cash recovery. Determine the depreciation of the building, machinery and equipment, an land improvements forthe current year. Depreciation ofthe bulaing |.old bullsing 100% /25= 4% 2 8% {cost 7,500,000 AD 1.648.500 CA 5,855,500 x 8% 468,440 1. bullding acquired on Jan 1 25,000. 50 = 1,250,000 6001/7507 tocosto sax = —anamDepreciation of machinery and equipment |.old machine which includes machine disposed on Dec 20) 2.250,000=0 10 = 225,000 I. machine acquired on Jul 1 x 6/12 a Depredtion offend improvement ‘Acquired on March 32 mx ohn = A Bing OT WS CUTER VET, BUIGERCORPARY FOpGPES We TOUOWITE TOPS, plant, andequipment and accumulated depreciation Cost ‘Accumulated depreciation land 550,000 Building 6,000,000 1.327800 Machinery 1,380,000 5367500 building Double declining balance, 2 years, residual value is 10% of cost Machinery Straightline 10 years + On January 1, the entity competed the self construction ofa building, Directcosts of construction were P2,220 000, Construction ofthe building required 15,000 direct labor hours. The construction department has an overhead allocation system for ‘outside obs based on an activity denominator of 100,000 direct labor hous, budgeted fixed cost of P2,500,000, and budgeted variable cost of P27 per diect labor hour Directcosts 2,220,000 Fixed overhead 200.000 400,000 25)or 25,000 375,000, Variable overhead 27% 15,000 “Total cost ‘4 On July 1, machinery was purchased ata total involee cost of P356,000. Aion costs of 23,000 to reesty damage on delivery and P18,000 for concrete embedding of machinery were incurred > Thisscoptaizable because this is acost directly attrbutabl to bringing the asset to the location and condition necessary fori tobe capable of operating in the manner Intended by management. Cosaf he machine 586,000 18,000 + 7,000 + 79,01. Determine the depreciation of bulldng fr the current year. 300%] 20=5% 22 10% 6,000,000 7. old: 109% x 4)672,200 Hl. New 10% x 3,000,000 2. Determine depreciation of machinery forthe current year. hota 1380.000-0 30 = 138,000 H.new -400,000=0 10 x 6/2 20,000