PROBLEM SET #1 final term

1. Small machine costing 80,000 has a salvage value of x at the end

of its useful life of 5 years. The book value at the end of the
4th year is 22,400. What is the value of x using straight line
method of depreciation?
2. An engineer bought an equipment for 500,000. Other expenses
including installation amounted to 30,000. At the end of its
estimated useful life of 10 years, the salvage value will be 10%
of the first cost. Using straight line method of depreciation,
what is the book value after 5 years?
3. An equipment costing 185,000 has a salvage value of 20,000 at the
end of its economic life of 5 years. Cost of money is 20% per
annum. The first-year depreciation is calculated to be 66,439.
Find the method of depreciation used.
4. A machine has a first cost of 60,000. Depreciation cost is
computed by using a constant percentage of the declining book
value. The book blue at the end of 8 years will be 4,000.
a. What is the annual rate of depreciation?
b. What is the total cost of depreciation up the time the machine
is retired at 8 years.
5. Using declining balance method, determine the book value at the
end of 4 years of an equipment costing 7,350 having a life of 8
years and a salvage value of 350.
6. A machine costing 500,000 has a life of 10 years. Using the sum
of years digit method, the total depreciation at the end of 4
years is 276,945.45. Determine the salvage value.
7. A building cost 900,000 and will have a salvage value of 450,000
when retired at the end of 5 years. Using the sum of years digit
method, what is the sum of the depreciation cost in the first two
years.
8. A new civil engineer produces a certain construction material at
a labor cost of 16.20 per piece, material cost of 38.50 per piece
and variable cost of 7.40 per piece. The fixed charges on the
business are 100,000 a month. If he sells the finished product at
95 each. How many pieces must be manufactured each month to break
even?