1. A contractor imported a bulldozer for his job, paying P300,000 to the
manufacturer freight and insurance charges amounted to P20,000;
customs broker’s fees, and arrastre services, P10,000; taxes, permits.
And other expenses, P 30,000. If the contractor estimates the life of
the bulldozer to be 10 years with a salvage value of P20, 000,
determine the book value at the end of 6 years, using the straight line
formula.
2. An electronics balance cost P120,000 and has an estimated savings
value of P10,000 at the end of its 10 years life time. What would be
the book value after 3 years, using the straight line method in solving
for the depreciation?
3. On January 1, 2010, Company XYZ buys machinery for P20, 000. It
has a salvage value of P3,000 and an estimated useful life of 5 years.
Prepare a depreciation schedule.
Year
1
2
3
4
5
Book Value at
the beginning
of the year(P)
20,000
16,000
13,200
9,800
6,400
Depreciation(P)
3,400
3,400
3,400
3,400
3,400
Book Value at
the end of the
year(P)
16,600
13,200
9,800
6,400
3,000
4. An equipment costs P10,000 with a salvage value of P500 at its end of
15 years. Calculate the annual depreciation cost by sinking fund
method at 4% interest.
5. An equipment costing P500,000 has an estimated life of 15 years with
a book value of P30,000 at the end of the period. Compute the
depreciation charge and its book value after 10 years using sinking
fund method assuming 10% interest.
6. A mine purchased for P 1, 000,000 and it is anticipated that it will be
exhausted at the end of 20 year. If the sinking fund rate is 4%, what
must be the annual return from the mine to realize a return of 7% on
the investment?
7. If the contractor estimates the life of the bulldozer to be 10 yearswith
a salvage value of P20,000, determine the book value at the end of 6
years using the Matheson method. Since a contractor imported a
bulldozer for his job, paying P250,000 to the manufacturer. Freight
and insurance charges amounted to P18,000, Custom’s Broker’s fees
and arrastre services, P8,500; Taxes, permits and other expenses,
P25, 000.
8. A machine cost P60,000 will be retired at the end of 8 years. What is
the total cost up to the time the machine is retired if the annual rate of
depreciation is 28.72%? Use Matheson method.
9. An equipment costing P250,000 , has a life of 15 years. The book
value is P30,000 at the end of the period. Find the depreciation charge
and its book value after 10 years using Matheson formula.
10.
An equipment costing P250,000 , has a life of 15 years. The
book value is P30,000 at the end of the period. Find the depreciation
charge and its book value after 10 years using SYD method.
11.
An asset purchased for P120,000. Its life is 10 years. After that,
it will be sold for P12,000. Find the depreciation for the first yar using
the SYD method.
12.
A company purchased an asset for P10,000 and has a life of 20
years. If the salvage value is zero at the end of the 20 th year. What is
the depreciation in the 3rd year? Use SYD method.
13.
Determine the rate of depreciation, total depreciation up to the
end of 8th year and the book value at the end of 8 years for an asset
tha cost P15,000 and has an estimated scrap value of P2000 at the
endof 10 years by double declining method.
14.
A plant bought a calciner for P220,000 and used for 10 years,
the life span of the equipment. What is the value of the equipment after
5 years of use? Assume a scrap value of P20,000 for the double
declining balance method.
15.
An asset costing P50,000 has a life of 6 years, and a salvage
value of P5000. Calculate the depreciation charge using Double Rate
Declining Methodat the end of the 4th period.
16.
An electronics company acquired a machinery for P100,000 on
July 1, 2016. It has a life span of 10 years , scrap value of P4000.
Production of 400,000 units and working hours of 120,000. The
company use the machine for 14,000 hours in 2016 and 1800 hours in
2017. The machinery produces 36000 units in 2016 and 44,000 units in
2017. Compute the depreciation cost for 2017 using working hour
method.
17.
A photocopying machine has a value of P15000 on purchased
and has a scrap value of P2000 after 150, 000 hours of use. What is
the depreciation after 100, 000 of use?
18.
In problem #17, what is the value of the Photocopying machine
after 100,000 hours?
19.
In problem #16, using the output method. What is the
depreciation cost?
20.
A company purchased a machine that can produce 1,024,000 Si
wafer on its lifetime. If the original cost of the machine is P20,000,000
and has a scrap value P150,000 after its lifespan. What is the total
depreciation charge after 512,000 units of Si wafer produced?
21.
In question #20, what is the book value after 512,000 Si wafer
is produced?
22.
The cost of producing a computer diskettes is as follows;
Materials cost is P7 each, labor cost is P2 each, and other expense is
P1.5 each. If the fixed expense is P69,000/month, how many diskettes
must be produced to breakeven if each diskette is worth P45.
23.
Determine the breakeven point in terms of no. units produced
per month using the following; Selling Price/unit is P600, overhead
expense is P428,000, labor cost is P115, cost of materials is P76, other
expenses is P2.32.
24.
A factory has a production capacity of 700,000 units per year
and is only operating at 62% of capacity. The annual income is
P430,000. Annual fixed cost is P190,000 and variable cost is
P0.348/unit. What is the current profit?
25.
A manufacturer produce a unit at a labor cost of P8.50 and a
material’s cost of P23.50, the fixed cost is P10, 125 a month and a
variable cost is P2.5 a unit. If a unit sells for P48, how many pairs must
be produced and sold each month for the manufacturer to breakeven?
26.
A housewife brought a new washing machine costing P12,000 if
paid in cash. However, She can purchase it in installment basis to be
paid within 5 years. If the money is worth 8% compounded annually
what is the yearly amortization if all payments are to be maid at the
beginning of the year?
27.
Mr. Ayala borrows P100,000 at 10% effective annual rate of
interest. He must pay back the loan over 30 years with uniform
monthly payments due on the first day of each month. What does Mr.
Ayala pay each month?
28.
Find the present value in pesos of a perpetuity of P15,000
payable semi-annually if money is worth 8% compounded quarterly?
29.
The effective rate of 14% compounded semi-annually is?
30.
What is the corresponding effective rate of 18% compounded
semi quarterly?