Engineering Board Exam Reviewer · Depreciation: Straight Line and Sinking Fund Methods · easy

An asset costing P500,000 has a salvage value of P50,000 and a life of 12 years. Using straight-line depreciation, find the book value after 5 years.

  1. P312,500
  2. P187,500
  3. P462,500
  4. P337,500

Answer

A. P312,500

Solution

d= 500,000-50,00012=P37,500 per year. BV5=500,000-5(37,500)=P312,500.

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