CE40-2/A2

24/07/2022
MORAELS, Medwin Miguel M.
Student Number CE/3
2017130414
M3-CPR-10%
Class Produced Reviewer

STRAIGHT LINE METHOD:

1. A company has a balance cost of 100,000 and has an estimated salvage value of 8,500 at the
end of 10 years of lifetime. What would the book value after 4 years? Use the straight-line
method for finding the depreciation.

Given: CO 100,000
CL 8,500
L 5 years
n 4 years
number of years BVB Depreciation Cost Accumulated depreciation BVE
1 100,000 18300 18300 81,700
2 81,700 18300 36600 63,400
3 63,400 18300 54900 45,100
4 45,100 18300 73200 26,800
5 26,800 18300 91500 8,500

ENGR. CHARITY HOPE GAYATIN

SINKING FUND METHOD
2. A techsupport company bought equipment for their servers. The equipment cost is 600,000
pesos. Other expenses like installation are equivalent to 4,000 pesos. The equipment is
expected to have a life of 14 years with a salvage value of 10% of the original cost of the
equipment. Determine the value at the end of 7 years by sinking fund method at 12%
interest.

Given: Co 604,000
CL 60000
L 14
n 7
Interest 12%
number of years BVB Depreciation Cost Accumulated depreciation BVE
0 0 16793.95788 0 604,000
1 604,000 16793.95788 16793.95788 587,206
2 587,206 16793.95788 35603.19071 551,603
3 551,603 16793.95788 56669.53148 494,933
4 494,933 16793.95788 80263.83314 414,669
5 414,669 16793.95788 106689.451 307,980
6 307,980 16793.95788 136286.143 171,694
7 171,694 16793.95788 169434.438 2,259
8 2,259 16793.95788 206560.5285 -204,301
9 -204,301 16793.95788 248141.7498 -452,443
10 -452,443 16793.95788 294712.7177 -747,156
11 -747,156 16793.95788 346872.2017 -1,094,028
12 -1,094,028 16793.95788 405290.8237 -1,499,319
13 -1,499,319 16793.95788 470719.6805 -1,970,038
14 -1,970,038 16793.95788 544000 -2,514,038

Matheson’s Formula (2 problems).

ENGR. CHARITY HOPE GAYATIN

 3. A specific type of NFT bored ape loses 12% of its value each year. The NFT costs 30,000
pesos originally. Make out a schedule showing the yearly depreciation, the total depreciation,
and the book value at the end of each year for 7 years.
Given: CO 30,000
L 7
K 12%

number of years BVB Depreciation Cost Accumulated depreciation BVE

0 0 0 0 30,000
1 30,000 3600 18300 26,400
2 26,400 3168 36600 23,232
3 23,232 2787.84 54900 20,444
4 20,444 2453.2992 73200 17,991
5 17,991 2158.903296 91500 15,832

4. Determine the rate of depreciation, the total depreciation up to the end of the 8th year and
the book value at the end of 8 years for an asset that costs ₱15,000 new and has an
estimated scrap value of ₱2,000 at the end of 10 years by (a) the declining balance method
and (b) the double declining balance method.
Given: CO ₱15,000.00
CL ₱2,000.00
L 10
n 8
no. of yrs BVB K Depreciation cost Accumulated depreciation BVE
0 ₱15,000.00 18.2488% ₱0.00 ₱0.00 ₱15,000.00
1 ₱15,000.00 18.2488% ₱2,737.33 ₱2,737.33 ₱12,262.67
2 ₱12,262.67 18.2488% ₱2,237.80 ₱4,975.12 ₱10,024.88
3 ₱10,024.88 18.2488% ₱1,829.42 ₱6,804.55 ₱8,195.45
4 ₱8,195.45 18.2488% ₱1,495.58 ₱8,300.12 ₱6,699.88
5 ₱6,699.88 18.2488% ₱1,222.65 ₱9,522.77 ₱5,477.23
6 ₱5,477.23 18.2488% ₱999.53 ₱10,522.31 ₱4,477.69
7 ₱4,477.69 18.2488% ₱817.13 ₱11,339.43 ₱3,660.57
8 ₱3,660.57 18.2488% ₱668.01 ₱12,007.44 ₱2,992.56
9 ₱2,992.56 18.2488% ₱546.11 ₱12,553.55 ₱2,446.45
10 ₱2,446.45 18.2488% ₱446.45 ₱13,000.00 ₱2,000.00

Double Declining Balance Method.

ENGR. CHARITY HOPE GAYATIN

 5. Determine the rate of depression, the total depreciation up to the end of the 9 th year and the
book value at the end of 9 year for an asset that costs 20,000 pesos new and has an
estimated scrap value of 2,000 pesos at the end of 11 years by using double declining
balance method.

Given: Co 20,000
CL 2000
L 11
n 9
no. of
yrs BVB K Depreciation cost Accumulated depreciation BVE
0 0 18% 0   20,000
1 20,000 18% 3636.363636 3,636 16,364
2 16,364 18% 2975.206612 6,612 13,388
3 13,388 18% 2434.259955 9,046 10,954
4 10,954 18% 1991.667236 11,037 8,963
5 8,963 18% 1629.54592 12,667 7,333
6 7,333 18% 1333.264844 14,000 6,000
7 6,000 18% 1090.853054 15,091 4,909
8 4,909 18% 892.5161351 15,984 4,016
9 4,016 18% 730.2404742 16,714 3,286
10 3,286 18% 597.4694789 17,311 2,689
11 2,689 18% 488.8386645 17,800 2,200

Sum of the Year Digit Method

ENGR. CHARITY HOPE GAYATIN
 6. A Computer costs 150,000 pesos. It has estimated to have a life of 6 years, with a salvage
value at the end of its life of 1,000 pesos. Determine the book value at the end of each year of
life. Use the Sum of year digit method.

Given: Co 150,000
CL 1000
L 6
number of years BVB Depreciation Cost Accumulated depreciation BVE
1 150,000 42571.42857 42571.42857 107,429
2 107,429 35476.19048 35476.19048 114,524
3 114,524 28380.95238 28380.95238 121,619
4 121,619 21285.71429 21285.71429 128,714
5 128,714 14190.47619 14190.47619 135,810
6 135,810 7095.238095 7095.238095 142,905
Total number of
n= 21

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