RALPH CHRISTIAN BALISTA

EDDIE ROGER P. SALUNTAO

A factory is constructed at a first cost of

P8,000,000 and with an estimated salvage
value of P200,000 at the end of 25 years.
Find its appraisal value of 10 years by
using all the seven methods of
depreciation, assuming an interest of 5%.
Assuming that there were 2,000,000 units
and it has been used for 12 hours a day.

TD = FC SV (X)
n
TD = 8,000,000 200,000 (10)
25
TD = P3,120,000
Bv = FC TD
Bv = 8,000,000-3,120,000
Bv = P4,880,000.00

A = (FC - SV)i
(1+i) n -1
= (8,000,000-200,000)(0.05)
(1.05) 25 -1
A = P163,429.17
TD = A[(1+i) X -1]
i
= 163,429.17[(1.05) 10 -1]
0.05
TD = P2,055,594.50

Bv = FC TD
Bv = 8,000,000 2,055,594.50
Bv = P5,944,405.50

K = 1- nSV/FC
K = 1- 25200,000/8,000,000
K = 0.1372

Bv = FC(1-K)10
Bv = 8,000,000(1-0.1372) 10
Bv = P1,828,905.86

K = 2/n
K = 2/25

Bv = FC(1-K) X
Bv = 8,000,000(1-2/25) 10
Bv = P7,360,000.00

SYD = n (1+n)
2
SYD = 25 (1+25)
2
SYD = 325
BV = FC-(FC-SV)
BV = 8000000-[(8000000-200000)25+24+23+22+21+20+19+18+17+16 ]
BV = P3,080,000.00

325

DEP = 8,000,000-200,000
UNIT
2,000,000
= P3.9/UNIT
Depreciation after 10 years:
T.D.=(P3.9/unit)(2,000,000units/25years)(10)
=P3,120,000
B.V=P8,000,000-P3,120,000
=P4,880,000

# of hrs = 12 hrs * 30 days * 12 months * 10 yrs.

1 day 1 month
1 year
= 43,200 hrs.
DEP = 8,000,000-200,000
HOUR
43,200
= P 180.556/hr.

Depreciation after 10 years:

T.D. = (P180.56/hour)(43,200 hrs/25yrs)(10)
=P3,120,007.68

B.V.= P8,000,000-P3,120,007.68
=P4,879,992.32