The first cost of an electric rebar bender is P364,000 and a salvage value of P45,000 at the end of its life for 5 years. Money is worth 5.9% annually. If there is no salvage value and the annual maintenance cost is P16,000, find the annual cost of perpetual service.
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.
Accountings
The first cost of an electric rebar bender is P364,000 and a salvage value of P45,000 at the end of its life for 5 years. Money is worth 5.9% annually. If there is no salvage value and the annual maintenance cost is P16,000, find the annual cost of perpetual service.
Express your answer in whole number.
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