LESSON 3- DEPRECIATION

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1. A machine has an initial cost of ₱50,000.00 and a salvage value of ₱10,000.00 after
10 years. What is the book value after five years using straight-line depreciation?
2. An asset is purchased for ₱500,000.00 the salvage value in 25 years is ₱100,000.00.
What is the depreciation in the first three years using the straight-line method?
3. A unit of welding machine costs ₱45,000 with an estimated life of 5 years. Its salvage
value is ₱2,500, find its depreciation rate of sinking fund method. Assuming that
will deposit the money to a bank giving 8.5%. Solve for the depreciation.
4. A ₱110,000 chemical plant had an estimated life of 6 years and a projected salvage
value of ₱10,000. After 3 years of operation, an explosion made it a total loss. How
much money would be raised to put a new plant costing ₱150,000, if a depreciation
reserve were maintained during its 3 years of operation by sinking fund method at
6%.
5. A machine costing ₱720,000 is estimated to have a life 0f 10 years. If the annual rate
of depreciation is 25%, determine the total depreciation using a constant percentage
of the declining balance method.
6. The cost of a certain asset is ₱3,000, its life is 6 years and the salvage value is ₱500.
Find the annual rate of depreciation under a constant percentage method.
7. An asset is purchased for ₱9,000.00. Its estimated life is 10 years, after which it will
be sold for ₱1,000.00, find the book value during the 3rd year if the SYD
depreciation is used.