BUSINESS FINANCE

ACTIVITY 2

NAME: VHETTY MAY C. POSADAS

YR & SEC: BSHM 2-A
DATE: March 16, 2022,

ACTIVITY 2: Word Problem:

Directions: Read and analyze carefully the given problem. Show your solution.

On January 2, 2016, ABC Company acquired a machine amounted to

P200,000 with a scrap value of P20,000 and an estimated life for three years.
Calculate the depreciation cost using Sum-of the- years-digit method. (25 points)

Sum of-the-years-digit method

SYD Factor = N (N+ 1)

2
Where N = the depreciable life of the asset in years

Machine P200,000 book value

Economic life --- 3 years

SYD = N (N+ 1)
2

= 3 (3 + 1)
2

= 3 (2)

=6

YEAR Depreciable Book SYD Factor Depreciation Expense

Value
1 200,000 X 3/6 P 100,000
2 200,000 X 2/6 66,667
3 200,000 X 1/6 33,333
P 200,000.00
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