7 A dump truck was bought for P 30 000 six years ago. It will have a salvage value of P 3 000 four years from now. It is sold now for P 8 000. What is its sunk cost (a cost that can’t be recovered due to certain reason) if the depreciation method used is the sinking fund method at 6%?

7 A dump truck was bought for P 30 000 six years ago. It will have a salvage value of P 3 000 four years from now. It is sold now for P 8 000. What is its sunk cost (a cost that can’t be recovered due to certain reason) if the depreciation method used is the sinking fund method at 6%?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A dump truck was bought for P 30 000 six years ago. It will have a salvage value of P 3 000 four years from now. It is sold now for P 8 000. What is its sunk cost (a cost that can’t be recovered due to certain reason) if the depreciation method used is the sinking fund method at 6%?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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