Reference no: EM133026615

Question - On June 1, 2019, Enix Company purchased an equipment costing P89,000. It is estimated that the machine will have a P5,000 residual value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 42,000 and its total production is estimated at 525,000 units. During 2019, the machine was operated 6,000 hours and produced 55,000 units. During 2020, the machine was operated 5,500 hours and produced 48,000 units.

Note: Round off amounts to the nearest peso. Round off per unit/hour amounts to the nearest centavo. Use the exact fraction/percentage for your depreciation rates.

Based on the information above, answer the following questions:

1. Compute the depreciation on the machine for the year ended December 31, 2019 using the straight-line method.

2. Compute the carrying amount of the machine as at December 31, 2020 using the straight-line method.

3. Compute the depreciation on the machine for the year ended December 31, 2019 using the activity method (units-of-output).

4. Compute the carrying amount of the machine as at December 31, 2020 using the activity method (units-of-output).

5. Compute the depreciation on the machine for the year ended December 31, 2019 using the activity method (working-hours).

6. Compute the carrying amount of the machine as at December 31, 2020 using the activity method (working-hours).

7. Compute the depreciation on the machine for the year ended December 31, 2020 using the sum-of-the-years'-digits method.

8. Compute the carrying amount of the machine as at December 31, 2020 using the sum-of-the-years'-digits method.

9. Compute the depreciation on the machine for the year ended December 31, 2020 using the double declining balance method.

10. Compute the carrying amount of the machine as at December 31, 2020 using the double declining balance method.