ECONOMICS

1. A broadband company purchased a microwave radio equipment for ₱7,000,000. Freight and installation charges amounted to
5% of the purchase price. If the equipment shall be depreciated over a period of 9 years with a salvage value of 6% determine
the annual depreciation charges.

2. 2. A unit of lathe machine costs $550,000 with an estimated life of 8 years. Its salvage value is $4000 find its depreciation rate of
sinking fund method. Assuming that will deposit the money to a bank giving 9%. Solve the depreciation.

3. 3. XYZ corporation makes its policy that for every equipment purchased, the annual depreciation cost should not exceed 20% of
the first cost at any time without salvage value. Determine the length of service if the depreciation used SYD.

4. 4. A machine costing ₱820,000 is estimated to have a book value of ₱404,54.73 when retired at the end of 10 years. If the annual
rate of depreciation is 35%, find the total depreciation using a constant percentage of the declining balance method.

5. 5. A certain machine which cost ₱750,000 when a brand-new has a salvage value of x pesos and is expected to last for 25,000
hours in a period of 6 years. In the first year of service, it was used for 7,500 hours. If the book value of the machine of the
equipment is ₱450,000 at the end of the first year, what is the value of "x".
1. An architect bought equipment for $650,000. He spent an additional amount of $35000 for installment and other expenses. The
estimated useful life of the equipment in 15 years. The salvage value is x% of the first cost. Using straight line method of
depreciation, the book value at the end of years will be $300,000. What is the value of x?

2. Determine the book value of a machine at the end of 8 years which has a first cost of P29,000 and a salvage value of P5,000 at
the end of 10years. Use sinking fund method at 5%.

3. A computer costs P70,000, has a life of 8years and a salvage value of P350 at the end of 9 years. Determine the depreciation
charge during the 4th year using the sum of years digit method. Compute also the total depreciation at the end of 4th year.

4. The cost of a certain asset is P89000, its life is 15 years and a scrap value of P8900. Find the annual rate of depreciation under a
constant percentage method and construct a depreciation table.

5. HBO owns filming equipment that cost P970000. After 18 years it will have an estimated salvage value of P36,000. Compute the
depreciation charge for double rate declining balance method for first two years and the book value at the end of 5years.

6. A natural gas is purchased for P105,00,000 and it is anticipated that it will be exhausted at the end of 25 years. If the sinking fund
rate from the mine to realize return of 9% on the investment?
1. A plant has the original value of $5,000,000. The scrap value in 10 years time is expected to be $20,000. Determine
the rate of depreciation when the management wants to depreciate it.

2. A machine has an initial cost of P100,000 and a salvage value of P15,000 after 10 years. Find the depreciation rate as
percentage of initial cost using straight line method.

3. A commercial building has a salvage of Php 1,000,000 after 50 years. Annual depreciation is Php 2,000,000. Using
straight line method how many years after should you sell the building for Php 30,000,000?

4. An engineer bought an equipment for P1,000,000. He spent an additional amount of P300,000 for installation and
other expenses. The salvage value is 15% of the first cost. If the book value a the end of 7 years will be P333,125
using straight line method of depreciation, compute the useful life of the equipment in years.

5. The first cost of a machine is P1,800 with a salvage value pf P300,000 at the end of its 6 years of life. Determine the
total depreciation after 3 years using the straight line method of depreciation?

6. Equipment purchased on October 1st for $50,000 with a salvage value of $10,000 and a useful life of 5 years.
Calculate the depreciation for the first year.

7. A delivery truck is bought for $60,000 with a salvage value of $6,000 and a useful life of 6 years. Calculate the book
value at the end of the 3rd year
8. A surveying equipment costs P100,000 has a life expectancy of 10 years and a salvage value of P20,000 at the end of
its life. The book value at the end of “x” years is equal to P44,000. Using straight line method of depreciation, solve
for the value of “x”

9. An asset for drilling was purchased and placed in service by a petroleum production company. Its original cost
$90,000 and it has an estimated market value of $15,000 at the end of an estimated useful life of 15 years. Compute
the depreciation amount in the third year and the book value at the end of the fifth year of life using the straight line
method.

10. An electronic balance cost P90,000 and has an estimated salvage value of P8,000 at the end of its 10 years lifetime.
What would be the book value after 3 years using the straight line method in solving for the depreciation.