Engineering Board Exam Reviewer · Depreciation: Declining Balance and Sum-of-Years-Digit Methods · medium

An asset costs P300,000 and has a salvage value of P30,000 after 6 years. Using the declining balance method, find the book value at the end of year 3.

  1. P165,000
  2. P13,162.86
  3. P94,868.33
  4. P139,247.67

Answer

C. P94,868.33

Solution

k=1- [6] 30,000300,000=1-0.11/6=0.318708. BV3=300,000(1-k)3=300,000(0.1)3/6=P94,868.33.

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