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TOPIC: DEPRECIATION PROBLEM #3 CC Company used a hand tool in the...

TOPIC: DEPRECIATION

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PROBLEM #3
CC Company used a hand tool in the manufacturing activities. On January
1, 2019, there are
800 of such tools on hand at cost of P200 each. Acquisition and
retirement during 2019 and
2020 are:
Retirement and
Estimated
Acquisition and
Retirement
value of tools
Cost
proceeds
at year-end
2019
400 @ P300
300 @ P50
200,000
2020
900 @ P400
700 @ P70
350,000
Retirement may be assumed to be on
first-in, first-out basis.
REQUIRED: Compute for the carrying amount of the tools as of
December 31, 2019 and 2020
under the following methods:
Retirement
b) Replacement
c) Inventory

Business
Accounting
Comments (2)

Answer
Answer & Explanation
Solved by verified expert
A. 15,000 & 49,000

B. 65,000 & 219,000

C. 200,000 & 350,000

Step-by-step explanation

Image transcription text

Problem 3
300 x P 50
= 15,000
( ) Beg Inv (800 x 200)
160,000
2020 700 X 70
=
49,000
Purchases ( 400 x 300)
120, Boo
Total Inventory
280,000
B. 2019
cost of Good sold
(
80,1020)
Beg
800 x P 200 = 160, 000
Ending Inventory - 201g
coor oort
Acquisition
400
X 300 = 120,000
Retirement
300 x
50
: (15, 1000 )
265, 000
Beg Inventory (800 x 200)
160,000
value of tools a year and
( 200, 000)
360,000
Replacement 2019
65, 000
Purchases (900 x 400)
Total Inventory
520,000
2020
Cost of Goods Sold
( 170,000
Beg
800 X 200
160, 000
Ending Inventory - 2020
350 , 600
Acquisition
900 x 400
360, 250
Retirement
700 * 70
49, 000
569, 000
value of tools a year end
( 350,090)
Replacement
2020
219, 000

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