Mocha Bescco, a firm that provided Operations Research services, bought a karaokemachine 8 years ago. They need to know how much it costed, but they’ve lost thereceipt. However, they found a scratch paper with some depreciation details recordedin it. Apparently, they estimated a book value of P13,000 for the 4th year and believedthat it had a lifespan of 8 years with a P2,550 scrap value. They are unsure if theyused the declining balance method or the double declining balance method. Find itsoriginal cost using these two methods.
Mocha Bescco, a firm that provided Operations Research services, bought a karaokemachine 8 years ago. They need to know how much it costed, but they’ve lost thereceipt. However, they found a scratch paper with some depreciation details recordedin it. Apparently, they estimated a book value of P13,000 for the 4th year and believedthat it had a lifespan of 8 years with a P2,550 scrap value. They are unsure if theyused the declining balance method or the double declining balance method. Find itsoriginal cost using these two methods.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mocha Bescco, a firm that provided Operations Research services, bought a karaokemachine 8 years ago. They need to know how much it costed, but they’ve lost thereceipt. However, they found a scratch paper with some depreciation details recordedin it. Apparently, they estimated a book value of P13,000 for the 4th year and believedthat it had a lifespan of 8 years with a P2,550 scrap value. They are unsure if theyused the declining balance method or the double declining balance method. Find itsoriginal cost using these two methods.
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