Reference no: EM132945943

Questions -

Q1. On January l, 2020, Erylle Company purchased an equipment for P1,970,000. On this date, the equipment has an estimated economic useful life of 12 years and estimated residual value of P98,000. It is the company's policy to depreciate this type of equipment using a sum-of-years digit. On January 1, 2024, Erylle Company made a review of the estimated life and salvage value of the equipment and the review revealed that the asset has a revised total life of 14 years and a residual value of P 100,000. The company also changed the method of depreciation to straight-line. What is the carrying value of the asset on December 31, 2025?

Q2. On January 1, 2019, a entity purchased a mineral mine for P26,400,00 with removable are estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to the original condition at an estimated cost of P2,200,000. The present value of the estimated restoration cost is P 1,800,000. The property can be sold afterwards for P3,000,000.

During 2019, the entity incurred P2,000,000 exploration cost and P1,600,000 development cost preparing the mine for production. The entity removed 80,000 tons of ore and sold 60,000 tons of ore in the current year. What is the depletion for the current year?

Q3. An entity used the composite method of depreciation based on 25% composite rate. On January 1, 2019, the total cost of equipment was P5,000,000 with total residual value of P600,000 and accumulated depreciation of P3,000,000. In January 2019, the entity purchased an equipment for P2,500,000 with no residual value. On December 31, 2019, the entity sold an equipment costing P 1,000,000 for P350,000. The said equipment was acquired on January 1, 2017 with residual value of P200,000. What amount of depreciation should be recognized for 2019?

Q4. An entity purchased equipment on January 1, 2019 for P5,000,000. The equipment had a useful life of 5 years and residual value of P600,000. The policy is to depreciate 5-year assets using the 200% double declining method for the first 2 years and then switch to straight line. What amount should be reported as accumulated depreciation on December 31, 2021?

Q5. On January 1, 2021, Irene's Corporation bought a factory equipment for P924,000 salvage value was estimated at P24,000. The asset will be depreciated over 10 years using the double declining balance method. How much is the total accumulated depreciation to be reported in the balance sheet on December 2021.