A solar panel unit has been purchased by a company for electricity back up. The solar unit costs P70,000 alone. Additional payment of P5,000 pesos has been made for shipment and P3,000 for installation. a. if the unit has an expected life of 12 years, what is annual depreciation cost by the straight-line (SL) depreciation method. The salvage value was estimated at P5000 at the end of unit’s life. b. Using sinking fund method, determine the annual depreciation cost. It is assumed that the annual charge for depreciation was deposited in a fund with a 6% compounded monthly.
A solar panel unit has been purchased by a company for electricity back up. The solar unit costs P70,000 alone. Additional payment of P5,000 pesos has been made for shipment and P3,000 for installation. a. if the unit has an expected life of 12 years, what is annual depreciation cost by the straight-line (SL) depreciation method. The salvage value was estimated at P5000 at the end of unit’s life. b. Using sinking fund method, determine the annual depreciation cost. It is assumed that the annual charge for depreciation was deposited in a fund with a 6% compounded monthly.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A solar panel unit has been purchased by a company for electricity back up. The solar unit costs
P70,000 alone. Additional payment of P5,000 pesos has been made for shipment and P3,000 for
installation.
a. if the unit has an expected life of 12 years, what is annual
end of unit’s life.
b. Using sinking fund method, determine the annual depreciation cost. It is assumed that
the annual charge for depreciation was deposited in a fund with a 6% compounded
monthly.
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