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How much is the book value of the equipment on December

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Question - A national government agency purchased office equipment on March 10, 2015 and was available for use only on April 5, 2015. The invoice price amounted to P500,000. The estimated life of the asset is 5 years. Depreciation is to be considered as one month if available for use on or before the 15th of the month. However, if the PPE is available for use after the 15th of the month, depreciation is for the succeeding month. Assume that the company estimates 5% salvage value for the office equipment.

Required -

1. How much is the depreciation expense for 2015?

a. P95,000 b. P90,000 c. P79,167 d. P71,250

2. How much is the book value of the equipment on December 31, 2016?

a. P325,833 b. P333,750 c. P335,000 d. P283,750

3. Assuming that the asset will be sold at the end of its useful life for P20,000, how much is the loss or gain on sale of PPE?

a. P25,000 loss b. P5,000 loss c. P10,000 loss d. P5,000 gain

Reference no: EM133096431

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