Construct a depreciation schedule for the following problems
3.) Duncan bakery purchased a new bread oven for ₱125,000. Shipping charges were ₱1500 and installation amounted to₱ 750. The oven is expected to last five years and has a residual value of ₱5000. If Duncan elects to use use the straight line method, calculate the total cost, total depreciation. And annual depreciation of the oven. Prepare a schedule.
First, we need to find the total purchase cost of the asset.
Purchase price ₱125,000
Shipping Charges ₱1,500
Installation amount ₱750
=Purchase price +Shipping Charges +Installation amount
Therefore the total cost of the asset ₱ 127,250.
Given:
Cost of the asset ₱127,250
Residual Value ₱ 5,000
The life of the asset is 5 years
Annual Depreciation
Substituting the values in the equation:
Annual Depreciation
Therefore, annual depreciation is ₱24,450.
Total Depreciation
Therefore , the total depreciation is₱ 122,250
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