Chapter 17 Problem 17-26 to 30
Problem 17-26 Answer B
The first three fractions are:
2006 10/55
2007 9/55
2008 8/55
Thus, the 2008 depreciation of P240,000 is equal to 8/55.
Depreciable cost (240,000 / 8/55) 1,650,000
Salvage 50,000
Total cost 1,700,000
Problem 17-27 Answer B
April 1, 2006 to March 31, 2007 (5/15 x 3,000,000) 1,000,000
April 1, 2007 to March 31, 2008 (4/15 x 3,000,000) 800,000
Accumulated depreciation, March 31, 2008 1,800,000
Problem 17-28 Answer A
The accumulated depreciation on December 31, 2007 is recomputed following a certain method. The same is arrived at following the SYD as follows:
SYD = 1 + 2 + 3 + 4 + 5 = 15
2005 (5/15 x 900,000) 300,000
2006 (4/15 x 900,000) 240,000
2007 (3/15 x 900,000) 180,000
Accumulated depreciation – 12/31/2007 720,000
Accordingly, the SYD is followed for 2008.
2008 depreciation (2/15 x 900,000) 120,000
Problem 17-29 Answer B
Straight line rate (100% / 8 years) 12.5%
Fixed rate (12.5 x 2) 25%
2007 depreciation (1,280,000 x 25%) 320,000
2008 depreciation (1,280,000 – 320,000 x 25%) 240,000
Problem 17-30
1. 4,000,000 – 2,560,000 x 40% (Answer D) 576,000
2. 1,800,000 x 2/15 (SYD) (Answer A) 240,000
3. Sales price 1,700,000
Book value (2,800,000 – 1,344,000) 1,456,000
Gain (Answer A) 244,000
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