a brand new machine is estimated to have a salvage value of P10000 after 10 years...

a brand new machine is estimated to have a salvage value of P10000 after 10 years and book value of P30,000 after 5 years, what is the initial cost of the machine? (assume straight line depreciation)

Solutions

Expert Solution

According to Straghtline method, depreciation every year remains the same, hence depreciation annually is calculated using the information given and then the standard formula to calculate the cost of machine is used.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Wheeling-Pittsburgh Steel Company installed a new machine at a cost of $285000. The expected salvage value of this machine was $50000 after 10 years. During this 10 years, the annual revenue was $52000.

Wheeling-Pittsburgh Steel Company installed a new machine at a cost of $285000. The expected salvage value of this machine was $50000 after 10 years. During this 10 years, the annual revenue was $52000.Did the company recover the investment at 12% per year return?If the annual operating cost was $10000 the ﬁrst year and increased constantly by $1000 per year, estimate if the AW was negative or positive at interest of 12% per year? Assume the salvage value of the machine...

Consider a machine that has an initial cost of $126,000 and an estimated salvage value of...

Consider a machine that has an initial cost of $126,000 and an estimated salvage value of $27,000. After some analysis we conclude that this machine will have O&M costs of $1,850 per year but based on the faulty nature of this machine we will have to incur in major maintenance costs at the end of year 3 and 6. During year 3 we expect to pay $14,000 and for year we estimate a $16,500. The machine will have a useful...

A machine with an original cost of $120,000 and no salvage value had an estimated useful...

A machine with an original cost of $120,000 and no salvage value had an estimated useful life of 6 years, but after 2 complete years, management decided that the orignal estimate of useful life should have been 8 years. Using a T-Chart template, prepare the following entries: A. Depreciation for Year 1 B. Depreciation for Year 2 C. Depreciation for Year 3

Question 14 A machine initally costing $520000 will have salvage value of $2000 after a 6...

Question 14 A machine initally costing $520000 will have salvage value of $2000 after a 6 year life. using double declining balance depreciation what will the book value be after the third year

A copier costs X and will have a salvage value of Y after n years. i)...

A copier costs X and will have a salvage value of Y after n years. i) using the straight line method, the annual depreciation expense is $1000. ii) using the sum of the years digits method, the depreciation expense in year 3 is $800. iii) using the declining balance method, the depreciation expense is 33.125% of the book value at the beginning of the year. Calculate X (provide excel spreadsheet in your answer).

A machine costing $214,800 with a four-year life and an estimated $20,000 salvage value is installed...

A machine costing $214,800 with a four-year life and an estimated $20,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 121,800 in 1st year, 122,600 in 2nd year, 121,500 in 3rd year, 131,100 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is installed...

A machine costing $213,200 with a four-year life and an estimated $16,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 493,000 units of product during its life. It actually produces the following units: 122,600 in Year 1, 122,500 in Year 2, 120,100 in Year 3, 137,800 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,800 with a four-year life and an estimated $19,000 salvage value is installed...

A machine costing $213,800 with a four-year life and an estimated $19,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 487,000 units of product during its life. It actually produces the following units: 121,700 in 1st year, 123,800 in 2nd year, 121,100 in 3rd year, 130,400 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $209,200 with a four-year life and an estimated $18,000 salvage value is installed...

A machine costing $209,200 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 478,000 units of product during its life. It actually produces the following units: 123,000 in 1st year, 124,100 in 2nd year, 121,200 in 3rd year, 119,700 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted....

A machine costing $213,600 with a four-year life and an estimated $16,000 salvage value is installed...

A machine costing $213,600 with a four-year life and an estimated $16,000 salvage value is installed in Tonys Company’s factory on January 1. The factory manager estimates the machine will produce 494,000 units of product during its life. It actually produces the following units: 121,800 in Year 1, 123,500 in Year 2, 121,100 in Year 3, 137,600 in Year 4. The total number of units produced by the end of Year 4 exceeds the original estimate—this difference was not predicted....

Subjects