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Choebee Company purchased an equipment at the beginning of 2017 in the amount of P1,800,000. The company depreciates this asset over a 6-year period, with a salvage value of 10% of original cost. At the beginning of 2019, the following changes were effected:
a. Remaining life has been extended by a year from the date of change
b. The salvage value has been reduced to 5% of the asset's original cost.
Problem 1: Compute for the December 31, 2019 carrying value of the asset and the depreciation expense for the year under each of the following independent cases:
a. A change from straight-line depreciation to SYD method
b. A change from SYD method to double-declining balance method
Financial Statement Analysis and Preparation
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