9.

Based on the data below, Compute the Depreciation expense for 2012 on
Delivery Equipm ent.

Audited balances at December 31 2011:

12 let di
Land P 7,500,000
Buildings 60,000,000
Accumulated depreciation- buildings P 13,155,000
Machinery and Equipment 45,000,000
Accumulated depreciation — Machinery and Equipment 12,500,009
Delivery Equipment 5,750,000
Accumulated Depreciation- Delivery Equipment 4,230,000

Depreciation Da.
Depreciation Method Useful Life
Buildings 150% declining-balance 25 years
Machinery and Equipment Straight-Line 10 years
Delivery Equipment Sum of the years' digits 4 years
Leasehold Improvements Straight line
Transactions during 2012 and other infomiation are as follows:
a) On January 2, 2012, Ukulele purchased a new truck for
P1,000,000 cash and trade-in of a 2 year old truck with a cost of P900,000 and a book value
of P270,000. The new hick has a cash price of P1,200,000; thf market value of the trade in
is not known.
b) On April 1 ,2012, a machine purchased for P1,150,000 on April
1 ,2007, was stolen. Ukelele recovered P775,000 from its insurance company.
c) On May 1, 2012, costs of P8,400,000 were incurred to improved
leased office premises. The leasehold improvements have a useful Ide of 8 years. The
related lease terminates on December 31, 2018.
d) On July 1, 2012, machinery and equipment were purchased at a
total invoice cost of P14,000,000; additional costs of P250,000 for freight and P1,250,000
for installation were incurred.
 e) Ukulele determined that the delivery equipment comprising the
P5,750,000 balance at January 1, 2012,
would have been depreciated at a total amount of P900,000 for the years ended December 31, 2012.
The salvage values of the depreciable assets are immaterial. The policy of Ukelele Company is to compute
depreciation to the nearest month.