Question

Do not use thousand separator, use 2 decimal places only (i.e. 1000.00 instead of 1,000).

What is the SYD five-year depreciation schedule for a truck that was purchased for Php4M with a lifetime of 5 years and has a residual value of Php750,000?

Year	1	2	3	4	5
SYD Fraction (in %)	%	%	%	%	%
Depreciation

Answer 1

Cost of truck = 4M or 4 million

= 4*1000000

= Php 4000000

Residual Value = Php 750000

Useful life = 5 Years

Step -1 Calculation of the sum of years digit in an assets useful life -

For an assets having useful life of 5 Years, the sum of years digit will be calculated as follows:

Sum of years digit = 5+4+3+2+1

= 15

Step - 2 Calculation of depreciable amount

Depreciable amount = Assets acquisition cost - Residual value

= 4000000-750000

= 3250000

Step -3 Calculation of the un-depreciated useful life

	year 1	year 2	year 3	year 4	year 5
Undepreciated Useful life	5	4	3	2	1

Step 4 Calculation of the Depreciation expense -

Depreciation expense = Undepreciated useful life at the end of each year/ sum of years digit*Depreciable Amount

Year 1 = 5/15*3250000

= 1083333.33

Year 2 = 4/15*3250000

= 866666.67

Year 3 = 3/15*3250000

= 650000

Year 4 = 2/15*3250000

= 433333.33

Year 5 = 1/15*3250000

= 216666.67

		Year 1	Year 2	Year 3	Year 4	Year 5
a	Undepreciated Useful life	5	4	3	2	1
b	sum of years digit	15	15	15	15	15
c	SYD Fraction (%) (a/b)	33.33%	26.67%	20.00%	13.33%	6.67%
d	Depreciable base (acquisition cost - residual value)	3250000	3250000	3250000	3250000	3250000
e	Depreciation Php (c*d)	1083333.33	866666.67	650000.00	433333.33	216666.67

Please check with your answer and let me know.