5:48 PN 32%( TitleGive SolutionTen years ago, a contractor was able topurchase a crane whose capacity is 2000tons costing P125per ton. The life was estimated to be 15years with a salvage value of 10% of thecost. A market hasbeen found for the old crane for P80,000. Ifthe depreciation has been figured on astraight linebasis what is the difference between thedepreciation book value of the old craneand its sale value.Answer:20,0001/1ETTT17II

Book value of the old crane available for sale = Cost - Accumulated depreciation at the time of sale…

Answered: straight line basis what is the…

Business

Accounting

straight line basis what is the difference between the depreciation book value of the old crane and its sale value.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The book value of a depreciable asset is A. The original cost of the asset. B. The…

A: Book value of a depreciable asset means value at which that asset is shown in the balance sheet of…

Q: Formula to calculate straight line depreciatio

A: Straight-line depreciation is an accounting technique that distributes the cost of a tangible item…

Q: The cost of a major addition to a long-lived asset should be recorded as an asset and depreciated…

A: True. The cost of a major addition to a long-lived asset should be recorded as an asset and…

Q: What entry is made when selling a fixed asset?

A: Following entry is passed when selling the fixed assets:

Q: In calculating depreciation, both the long-lived asset's cost and useful life are based on…

A: Depreciation is a crucial aspect of accounting that reflects the allocation of an asset's cost over…

Q: Residual value is: A. Also called residual value. B. Also called scrap value. C. An estimate of the…

A: The depreciation expense is charged on fixed assets as reduced value of the fixed asset with usage…

Q: Explain the straight-line method of depreciation with an example?

Q: Estimates of an asset's salvage value and usable life are used to determine depreciation costs. Is…

A: Different methods of depreciation are based on the useful life of the asset. However, one of the…

Q: What are the journal entries for an accrual of rent expenses of $500? A Debit prepayments $500,…

A: We have the following information: Rent Expense: $500 Nature of Expense: Accrual

Q: It is the expected selling price of a property when the asset can no longer be used by its owner.…

A: Purchase value of assets is cost of assets purchase plus expenses incurred at the time purchase.

Q: which method of depreciation is used when the cost of an asset is written off in equal amounts over…

A: Depreciation represents the reduction in the value of an asset over an expected life.

Q: Which of the following answers is the correct formula for determining the his Select one: O a.…

A: Historical cost of an asset: It is a sun of purchase price and any cost incurred to bring the asset…

Q: Which depreciation method ignores residual value until the last year of depreciation? Why?

A: Double declining method of depreciation does not consider residual value while calculating…

Q: What element must be present when determining if an asset is a depreciating asset? a. An asset…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. depreciating…

Q: Can the selection of a depreciation method affect a company’s asset replacement policy (i.e., the…

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: Which of the following depreciation methods will result in the most depreciation expense over the…

A: Depreciation is method to allocate the cost of the Assets over its useful life

Q: First cost Book depreciation life MACRS property class Salvage value n 1 2 3 4 5 6 7 8 A $8,000…

A: Depreciation is used to record expenses of asset over the life of asset. There are various methods…

Q: State which statement is true or false The declining-balance method does not deduct the residual…

A: The declining-balance method does not deduct the residual value in computing the depreciation…

Q: What is the appropriate depreciation time for a new long-lived asset added to an existing one?…

A: Depreciation refers to the concept of evaluating the decrease in the value of an asset that occurs…

Q: Is residual value deductible when using accelerated method of depreciation>

A: The accelerated method of depreciation includes double declining balance method, 150% declining…

Q: Depreciation should be applied to a new long-lived item over what time period? Explain

A: This question explains about applied to a new long-lived item over what time period.

Q: Which of the following best describes depreciation? A.ccounts for the market value of a physical…

A: Depreciation is an expense which is shown and recorded in the expense side of the income statement.

Q: What is the amount of the annual depreciation computed by the straight-line method?

A: Depreciation: It is the reduction in the value of an asset due to normal wear and tear,…

Q: 32 Which of the following information is necessary to apply the straight-line method of depreciation…

A: Depreciation is used to record reduction in value of asset over the period of time. It can be…

Q: Depreciation is a process used to: a) Increase the value of an asset over time b) Allocate the cost…

A: In accounting, depreciation refers to the method of allocating the cost of a tangible or physical…

Q: Why does the depreciation included in computing the annual cost of annual worth method but not in…

A: Depreciation is a separate provision for fixed assets. Fixed amount is charged out of profit during…

Q: Equipment that is sold before the depreciation period has expired is what?

A: Depreciation is the allocation of cost of asset over the useful life of the asset. There are several…

Q: Salvage value is: O Also called residual value O Also called scrap value O An estimate of the…

A: Solution: salvage value is the value of an asset remaining after it has been fully depreciated. It…

Q: What does it mean the "property and equipment are started at cost"? A. Fair value B.historical…

A: As per IFRS/IAS 16 Property plant and Equipment is to be Initially measured at cost.

Q: When is accumulated depreciation reduced to zero? Explain and provide examples for each element…

A: Accumulated depreciation is a contra-asset account that represents the cumulative depreciation…

Q: How would you define depreciation and explain its purpose to someone who is not taking this course?…

A: Depreciation expense is the reduction in the value of assets due to normal wear and tear, the…

Q: in estimating the value of a property using the sales comparison approach, you would typically not…

A: The sales comparison approach represents the approach in which the property is compared with the…

Q: Which should be debited when depreciating a leased asset? a. Lease Liability b. Non-current Asset c.…

A: Answer- d . Depreciation expense Depreciating a leased asset is similar to a purchased fixed asset…

Q: Define straight-line depreciation method

A: Depreciation means fall in value of depreciable assets with passage of time. There are many methods…

Q: A gain or loss on the sale of a plant asset is determined by comparing the: A.…

A: Solution:- A gain or loss on the sale of a plant asset is determined as follows under:-

Question

5:48 P
N 32%
( Title
Give Solution
Ten years ago, a contractor was able to
purchase a crane whose capacity is 2000
tons costing P125
per ton. The life was estimated to be 15
years with a salvage value of 10% of the
cost. A market has
been found for the old crane for P80,000. If
the depreciation has been figured on a
straight line
basis what is the difference between the
depreciation book value of the old crane
and its sale value.
Answer:20,000
1/1
ET
T
T
17
II

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Calculation of the book value of the old crane available for sale

VIEW

Difference between the book value of the old crane and its sale value

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

3) Which of the following best describes a depreciation base?7) The acquisition cost of an asset relative to its fair value O The estimated market value of an asset at the end of its useful life O The historical cost of an asset less the depreciation recognized to date O The amount that should be expensed over an asset's useful life
1. What are the three main factors used in determining depreciation of a fixed asset? 2. What is the double-declining balance method and what are the benefits of it?
A limited-life intangible is reported at its ____________. a. replacement cost b. carrying amount unless impaired c. liquidation value d. acquisition cost
Which of the following statements about depreciation is not true? A. Depreciation does not mirror the actual loss of value over time. B. Depreciation is the allocation of the asset’s cost to expense over the expected years of use. C. If the fair value of the asset increases, depreciation is reversed to reflect the change in value. D. U.S. GAAP requires depreciation methods to be systematic and rational.
The salvage value is a component of the calculation of the double declining balance (DDB) depreciation method.True or False..
The difference between the purchase cost of an asset and its value at the end of the life is known as a. Residual value b. Scrap Value c. Depreciable cost d. Amortization cost
Why was the salvage value used in calculating the depreciation expense?
Describe the Book depreciation is the method?
Name depreciation methods that deduct residual value before an asset is depreciated.
Which depreciation method ignores residual value when computing the depreciable base of an asset? a. sum-of-the-year's-digits b. double-declining-balance c. composite depreciation d. group depreciation
Depreciation expense under the invenroty system is a. Based on cost minus residual value b. Basically a FIFO approach to depreciable asset accounting c. The result of applying a depreciation rate to the original cost d. A measure of the change in the value of the depreciable asset
Which of the following best describes depreciation?A It is a means of spreading the payment for the asset over its total estimated lifeB It represents the decline in the market value of the assetC It is a means of spreading the cost of an asset over its estimated useful lifeD It is a way of estimating the cash needed to replace the asset in the future