Question

P7-07 (N.B. a televisions 1979. It is es sears, scrap và sorking hours of E. Board, October 1981) company purchased machinery for P100.000 on July 1, e estimated that it will have a useful life of ten on value of P4,000, production of 400,000 units and is of 120,000. The company uses the machinery for rs in 1979 and 18,000 hours in 1980. The machinery 6.000 units in 1979 and 44,000 units in 1980. Com- preciation for 1980 using each method given below. a) Straight-line method produces 36,000 pute the deprecia (b) Working hours (v) Output method.

Answer 1

(a) Straight-line method :
Depreciation per year = ( Cost - Estimated scrap value ) / Estimated useful life = ( P100000 - P4000 ) / 10	P9600
Depreciation for 1980	P9600

(b) Working hours :
Depreciation per working hour = (Cost - Estimated scrap value ) / Estimated total working hours = ( P100000 - P4000 ) / 120000	P0.8	per working hour
Depreciation for 1980 = Depreciation per working hour * Working hours for 1980 = P0.8 * 18000	P14400

.(c)
Depreciation per unit = (Cost - Estimated scrap value ) / Estimated total units production = ( P100000 - P4000 ) / 400000	P0.24	per unit
Depreciation for 1980 = Depreciation per unit * Unit produced in 1980 = P0.24 * 44000	P10560