Year Working hours Production of units

2023 10,000 15,000

2024 35,000 50,000

Totals 400,000 120,000

a. straight-line method

Acquisition Cost 5,000,000

Less: Residual value - 200,000
4,800,000
Divide by: Useful life 10 yrs
Depreciation 6/12/23 240,000

Year Depreciation Accumulated Depreciation Carrying Amount

5,000,000
23 240,000 240,000 4,760,000
24 240,000 480,000 4,520,000
25 480,000 960,000 4,040,000
26 480,000 1,440,000 3,560,000
27 480,000 1,920,000 3,080,000
28 480,000 2,400,000 2,600,000
29 480,000 2,880,000 2,120,000
30 480,000 3,360,000 1,640,000
31 480,000 3,840,000 1,160,000
32 480,000 4,320,000 680,000
33 480,000 4,800,000 200,000

4,800,000
 b. working hours

Acquisition Cost 5,000,000

Less: Residual value - 200,000
4,800,000
Divide by: working hours 120,000
Depreciation 6/12/23 40

ing Amount Year Particulars

23 10,000 hours x Php 40

24 15000 hours X Php 40
c. Output method
Acquisition Cost 5,000,000
Less: Residual value - 200,000 Year Particulars
4,800,000
Divide by: units 400,000 23 35,000 units x Php 12
Depreciation 6/12/23 12 24 50,000 units X Php 12
25
26
27
28
29
30
31
32
33
Depreciation Accumulated Depreciation Carrying amount
5,000,000
400,000 400,000 4,600,000
600,000 1,000,000 4,000,000

Depreciation Accumulated Depreciation Carrying amount

5,000,000
420,000 420,000 4,580,000
600,000 1,020,000 3,980,000
 Cost Residual Value Depreciable Cost Useful Life
Machinery 450,000 50,000 400,000 5
Office Equipment 200,000 - 200,000 4
Building 5,800,000 200,000 5,600,000 20
Delivery Equipment 1,550,000 150,000 1,400,000 4
Totals 8,000,000 7,600,000

a. Composite depreciation rate

Total Depreciable Amount per year 7,600,000

Total Cost 8,000,000

Composite depreciation rate 0.95

b. composite life
Total depreciable cost 7,600,000
Total annual depreciation 760,000

Composite life 10

c. Journal Entry

Depreciation 760,000
Accumulated Depreciation 760,000
Depreciation per Year
80,000
50,000
280,000
350,000
760,000
 Original Cost Residual Value
Building 6,500,000 500,000
Machinery 2,350,000 350,000
Equipment 1,150,000 150,000

Totals 10,000,000

a. Composite rate

Total Annual depreciation 900,000

Divide by: Total depreciable cost 9,000,000

Composite rate 0.10

b. Composite life

Total Original cost 9,000,000

Divide by: Annual Depreciation 900,000

Composite life 10.00

c. journal entry for current year

Depreciation 900,000
Accumulated depreciation 900,000

d. journal entry to record retirement of machinery

Cash 100,000
Accumulated Depreciation 800,000
Machinery 900,000

e. journal entry to record depreciation for the 6th year

Total Original cost ₱ 10,000,000

Less: Cost of machinery retired 100,000

Remaining cost 9,900,000

Remaining cost 9,900,000

Multiply by: composite rate 0.10

Annual depreciation for 5th year ₱ 990,000

Depreciation 990,000
Accumulated Depreciation 990,000
Depreciable Cost Useful life in Years Depreciation per year/ Annual Depreciation
6,000,000 15 400,000
2,000,000 5 400,000
1,000,000 10 100,000

9,000,000 900,000
a. carrying amount of the main milling machine on december 31,2023
Acquisition Cost 7,500,000 Year
Residual Value
7,500,000 2017
Divided by: Useful life 10 2018
2019
Depreciation 750,000 2020
2021
Depreciation (april 1, 2017 - dec 31, 2017) 9/12 562,500 2022
2023
2024
2025
2026
2027

B. carrying amount of the first special component on april 1, 2023

Year
Acquisition Cost 1,200,000
Residual Value - 2017
1,200,000 2018
Divide by: Estimated useful life 6 2019
Depreciation 200,000 2020
2021
Depreciation (January 1, 2023 to April 1, 2023) 3/12 50,000 2022
2023

c. CA of second special component

Year
Acquisition Cost 2,000,000
Less: Residual Value (20% x 2,000,000) 400,000 2023
1,600,000 2024
Divide by: remaining useful life (10 years - 6 years) 4 2025
Depreciation 400,000 2026
2027
Depreciation (April 1, 2023 to December 31, 2023) 9/12 300,000 2028

d. total depreciation for 2023

Depreciation - Main Milling Machine 750,000

Depreciation - First Machine 50,000
Depreciation - Second Machine 300,000

Total depreciation for 2023 1,100,000

Depreciation Accumulated Depreciation Carrying amount
7,500,000
562,500 562,500 6,937,500
187,500 750,000 6,750,000
750,000 1,500,000 6,000,000
750,000 2,250,000 5,250,000
750,000 3,000,000 4,500,000
750,000 3,750,000 3,750,000
750,000 4,500,000 3,000,000
750,000 5,250,000 2,250,000
750,000 6,000,000 1,500,000
750,000 6,750,000 750,000
750,000
7,500,000

Depreciation Accumulated Depreciation Carrying Amount

1,200,000
200,000 200,000 1,000,000
200,000 400,000 800,000
200,000 600,000 600,000
200,000 800,000 400,000
200,000 1,000,000 200,000
150,000 1,150,000 50,000
50,000 1,200,000 -
1,200,000

Depreciation Accumulated depreciation Carrying amount

2,000,000
300,000 300,000 1,700,000
100,000 400,000 1,600,000
400,000 800,000 1,200,000
400,000 1,200,000 800,000
400,000 1,600,000 400,000
400,000 2,000,000 -
2,000,000
Composite life

Total Depreciable cost 720,000

Divide by: Total annual depreciation 45,000

Composite Life 16

Original Cost Residual Value

Machinery A 550,000 50,000
Machinery B 200,000 20,000
Machinery C 40,000

Totals 790,000
Depreciable cost Useful life in years Annual Depreciation
500,000 20 25,000
180,000 15 12,000
40,000 5 8,000

720,000 45,000
Acquisition cost ₱ 4,500,000.00 Year
Residual Value 500,000
Depreciable cost 4,000,000 23
24
Sum of the year's digits 25
4yrs + 3+2+1 10 26

Acquisition cost ₱ 3,300,000 Year

Residual Value ₱ 300,000.00
Depreciable cost ₱ 3,000,000.00 23
24
Sum of the Year's digits ₱ 15 25
5+4+3+2+1 26
27
Particulars Depreciation Accumulated Depreciation Carrying Amount
4,500,000
4/10*4,000,000 1,600,000 1,600,000 2,900,000
3/10*4,000,000 1,200,000 2,800,000 1,700,000
2/10*4,000,000 800,000 3,600,000 900,000
1/10*4,000,000 400,000 4,000,000 500,000

Particulars Depreciation Accumulated Depreciation Carrying Amount

3,300,000
5/15*3,000,000 1,000,000 1,000,000 2,300,000
4/15 x 3,000,000 800,000 1,800,000 1,500,000
3/15 x 3,000,000 600,000 2,400,000 900,000
2/15 x 3,000,000 400,000 2,800,000 500,000
1/15 x 3,000,000 200,000 3,000,000 300,000
 Acquisition Cost 3,300,000 Year
Less: Residual Value 300,000 23
Depreciable Cost 3,000,000 24

Depreciable cost (April 1 to Dec 31 2023) 9/12 2,250,000

Depreciation 2023 (5/15*2,250,000) 750,000 25

Carrying amount (3.3M - 750k) 2,550,000 26

Sum of the years digits 15 27

5+4+3+2+1
Particulars Depreciation for each useful life
5/15*3,000,000 1,000,000
4/15*3,000,000 800,000

3/15*3,000,000 600,000

2/15*3,000,000 400,000

1/15*3,000,000 200,000
 Depreciation
1,000,000 x (Apr 1 to Dec 31 2023) 9/12 750,000
1,000,000 x (Jan 1 to March 31 2024) 3/12 250,000
Add: 800,000 (Apr 1 to dec 31,2024) 9/12 600,000
850,000
800,000 x 3/12 (Jan 1 to March 31 2025) 200,000
Add:600,000 x 9/12 (Apr 1 to Dec 31 2025) 450,000
650,000
600,000*3/12 150,000
Add: 400,000*9/12 300,000
450,000
400,000*3/12 100,000
200,000*9/12 150,000
250,000
Accumulated Depreciation Carrying Amount
750,000 2,550,000

1,600,000 1,700,000

2,250,000 1,050,000

2,700,000 600,000

2,950,000 350,000
Requirement (A)

DEPRECIATION

Building (old) Building (new)

100% 100% Acquisition cost

Multiply by: useful life 25 Issued shares
Straight Line rate 4% Multiply by: market price
Multiply by: 2 2 Total acquired shares
Double Declining Rate 8%
Allocated to new building (600,000*750,000/1250000)
Asset Cost 7,500,000
Less: Accumulated depreciation 1,644,500 Acquisition Cost Building (new)
5,855,500 Multiply by: Double Declining rate
ultiply by: Double declining rate 8% Depreciation per period
Depreciation per period 468,440

Building - old 468,440

Building -new 80,000
Total Depreciation - Building 548,440

Machinery & Equipment

 25,000
₱ 50
1,250,000

1,000,000

1,000,000
8%
80,000