A tax- and duty-free importation of a 30-horsepower sand mill for paint manufacturingcosts P400,000 CIF Manila. Bank charges, arrester and brokerage cost P6,000.Foundation and installation costs were P30,000. Other incidental expenses amount toP25,000. Salvage value of the mill is estimated to be P65,000 after 20 years. Find theappraisal value of the mill using straight-line depreciation at the end of 12 vears.

Name: A tax- and duty-free importation of a 30-horsepower sand mill for pai
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Description: A tax- and duty-free importation of a 30-horsepower sand mill for paint manufacturingcosts P400,000 CIF Manila. Bank charges, arrester and brokerage cost P6,000.Foundation and installation costs were P30,000. Other incidental expenses amount toP25,0

Information Provided: Manufacturing costs = P400,000 Bank charges, brokerage costs = P6,000…

Answered: P25,000. Salvage value of the mill is…

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P25,000. Salvage value of the mill is estimated to be P65,000 after 20 years. Find the appraisal value of the mill using straight-line depreciation at the end of 12 vears.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4EA: Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is...

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Concept explainers

Depreciation Methods

The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.

Depreciation Accounting

In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.

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A tax- and duty-free importation of a 30-horsepower sand mill for paint manufacturing
costs P400,000 CIF Manila. Bank charges, arrester and brokerage cost P6,000.
Foundation and installation costs were P30,000. Other incidental expenses amount to
P25,000. Salvage value of the mill is estimated to be P65,000 after 20 years. Find the
appraisal value of the mill using straight-line depreciation at the end of 12 vears.

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A machine shop purchased 10 years ago a milling machine for P65,000. A straight-line depreciation reserve had been provided on a 21-year life of the machine. The owner of the machine shop desires to replace the old milling machine with a modern unit of many advantages costing P110,000. It can sell the old unit for P25,000. How much new capital will be required for the purchase? a.Php64,047.619 b.Php80,047.619 c.Php75,047.619 d.Php90,047.619