Assume that on January 1, 2020, Digong Dantes Car Wash bought a car wash equipment for ₱20,000.00, Digong Dantes paid shipping costs of ₱1,500.00 and setup costs ₱1,000.00, assumes a useful life of 5 years. Based on experience, Digong Dantes expects to sell the equipment of ₱5,000.00 at the end of its useful life. Give the values for the following:
Cost of Asset? Estimated Useful Life? Salvage Value? Depreciable Cost?
please help me :) i need the answer ASAP
Cost of Asset? Estimated Useful Life? Salvage Value? Depreciable Cost?
please help me :) i need the answer ASAP
Answers & Comments
Answer:
P 13, 500
Step-by-step explanation:
In solving for the Depreciation expense, there are several methods that ca be used. Based on the given problem, it is best to use the Straight Line Depreciation method.
The formula is:
(Book value-Salvage value) / Useful Life
Substituting the given to our formula,
(P 100, 000 - P 10, 000) / 5
P 18,000
We have P 18, 000 depreciation expense per year. However, for 2018, we only have to record depreciation for 9 months which is April 2018 - December 2018.
Thus, we multiply P 18, 000 to 9/12 (9 months out of the 12 months in a year) ans it will give us P 13, 500.
Therefore, the depreciation expense for 2018 is P 13, 500.
#CARRYONLEARNING