DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January 1,2008. At the date of purchase, DEF incurred the following additional costs: Loss on sale of old machinery P15,000 Freight cost 5,000 Installation costs 20,000 Testing costs prior to regular operation 4,000 The estimated salvage value of the machine was P50,000 and DEF estimated that the machine would have a useful life of 20 years, with depreciation being computed using the straight line method. In January 2010, accessories totaling P48,600 were added to the machine in order to reduce its operating costs. These accessories neither prolonged the machine’s life nor did they provide additional salvage value. What is the depreciation for 2010?
DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January 1,2008. At the date of purchase, DEF incurred the following additional costs: Loss on sale of old machinery P15,000 Freight cost 5,000 Installation costs 20,000 Testing costs prior to regular operation 4,000 The estimated salvage value of the machine was P50,000 and DEF estimated that the machine would have a useful life of 20 years, with depreciation being computed using the straight line method. In January 2010, accessories totaling P48,600 were added to the machine in order to reduce its operating costs. These accessories neither prolonged the machine’s life nor did they provide additional salvage value. What is the depreciation for 2010?
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter18: Accounting For Long-term Assets
Section: Chapter Questions
Problem 4CE: Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the...
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- DEF manufacturing company, a calendar-year company, purchased a machine for P650,000 on January 1,2008. At the date of purchase, DEF incurred the following additional costs:
Loss on sale of old machinery P15,000
Freight cost 5,000
Installation costs 20,000
Testing costs prior to regular operation 4,000
The estimated salvage value of the machine was P50,000 and DEF estimated that the machine would have a useful life of 20 years, with depreciation being computed using the
What is the depreciation for 2010?straight line method . In January 2010, accessories totaling P48,600 were added to the machine in order to reduce its operating costs. These accessories neither prolonged the machine’s life nor did they provide additional salvage value.
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