1. A brand new car cost P500,000 and the salvage value is 10% of the original cost after 20 years.

Find the book

value of this car after 5 years by straight-line-method.

2. A generator set costs P500,000 and the salvage value is 10% of the original cost after 20 years, find the
depreciation charge per year if the money worth 12%.

3. A car costs P500,000 and the salvage value is 10% of the original cost after 20 years. Find the depreciation
charge at the 8th year by the sum of the year’s digit method (SYDM).
4. A lathe machine cost P650,000 and the salvage value is P65,000 after 20 years, find the depreciation charge at
the 5th year by Matheson’s Formula,(Declining Balance Method, DBM).

5. A pump costs P50,000 and the useful life is 10 years. Find the book value after 8 years by double declining
balance method (DDBM).

6. A concrete hollow block (CHB) machine costs P40,000 and the salvage value is P4,000 after 6 years. If it can
make 108,000 pieces of hollow blocks within the useful life, find the depreciation charge at the year 1999 if it
made 15,000 pieces only.

7. A car costs P500,000 and the salvage value is P50,000 after 20 years. Find the book value after 5 years if money
worth 12% per annum.
8. A motor costs P60,000 and the salvage value is P6,000 after 10 years. If it was used for 28,800 hours within the
useful life, find its depreciation at the year 1998 if its total operating hours were 2,520.

9. A tractor costs P800,000 and whose salvage value is P40,000 after 10 years. Find the total depreciation after 6
years by declining balance method.

10. A generator costs P500,000 and whose salvage value is P10,000. After 20 years. Find the book value after 12
years by sum of the year’s digit method.

11. A personal computer costs P60,000 and the salvage value is P5,000 after 10 years. Find the book value after 6
years if the money worth’s 12% per annum.

12. A car costs P800,000 4 years ago and the salvage value is P50,000 6 years from now. If it is to be replaced by a
new one and the trade-in value is P450,000 find the sunk cost if money worth’s 12%.
13. To develop a timberland containing 2,000,000 trees required an initial investment of P30,000,000. In a certain
year, 400,000 trees were cut off. Find the depletion charge during the year.

14. A mining company has a gross income of P32,000,000 per month from the production of iron core. All expenses,
excluding depletion expenses, amount to P26,000,000 per month. If the fixed depletion rate of iron core is 15%,
what is the monthly depletion allowance?

15. Ten hectares of timberland will yield an annual profit of P1,000,000 for 10 years, after which the timber will be
exhausted. The land can be sold for P12,000 per hectare. If the prospective buyer wishes to earn 15% on his
investment and can deposit money in a sinking fund at 8%, determine the maximum price he could pay for the
timberland.

16. A machine costs P100,000 and with a useful life of 25 years. Find the book value after 3 years by using double
declining balance method.

17. A machine costs P80,000 and the salvage value is P20,000 after 20 years. Find the book value after 2 years by
using sum of the years digit method
18. A machine cost P80,000 and the salvage value is P20,000 after 20 years. Find the constant percentage in the
declining book value.

19. A machine cost P80,000 and the salvage value is P20,000 after 20 years. Find the sinking fund factor if interest
rate is 8% per year.

20. A machine costs P80,000 and the salvage value is P20,000 after 20 years. Find the depreciation charge by sinking
fund method if the interest rate is 8% per year.
carmela_cuya822@yahoo.com