Granny Inc. uses hand tool in its manufacturing activities. On Jan. 1, 2019, there are 800 of such

tools on hand at a cost of P40 each. Acquisition and retirement in the years 2019 and 2020 are:

Acquisition and cost Retirement and

Proceeds

Estimated value of tools

at year-end

2019, 400 @ P60 300 @ P10 P40,000

2020, 900 @ 80 700 @ 14 35,000

Required:

36. What is the depreciation in 2019 and 2020, respectively, using the retirement method?

37. What is the depreciation in 2019 and 2020, respectively, using the replacement method?

38. What is the depreciation in 2019 and 2020, respectively, using the inventory method?

Your audit of Coco Company's property plant and equipment account disclosed the following data as of

December 31, 2018:

Machinery Original Cost Date of

purchase

Useful life Salvage

Value

Depreciation Method

Aye P700,000 2012 10 years P62,000 SYD

Bee 1,020,000 2013 15,000 hours 60,000 Working hours

See 1,600,000 2014 15 years 100,000 Straight-line

Dee 1,600,000 2016 10 years 100,000 Double-declining

You have noted that the client's policy in depreciating asset is to take no depreciation on the year of

purchase and full year's depreciation on the year of disposal.

The following is a summary of the transactions in 2018:

A. On May 5, Machinery Aye was sold for P260,000 cash. The company's bookkeeper recorded

this retirement in the following manner in the cash receipt journal:

Cash 260,000

Machinery 260,000

B. On December 31, 2018, it was ascertained that Machinery Bee had been used for a

cumulative number of hours of 13,100 hours, 2,100 of which was utilized in 2018. Starting

2018 however, the management revised its estimate of the total useful life of Machinery Bee

from 15,000 hours to 18,000 hours with the salvage value being revised to P36,000.

C. On December 31, 2018, before computing for depreciation expense on Asset See, the

management decided that the asset's remaining useful life is 10 years from January 1, 2018.

D. On December 31, 2018, it was discovered that the plant asset purchased in 2017 has been

charged to repairs expense in 2017. The asset costs P440,000 and had a useful life of 10

years with no salvage value. Management has decided to use double declining balance

method for this asset and was referred to as machinery Eff.

Based on the information above and as a result of your audit:

39. What is the adjusted gain on sale of Machinery Aye?

40. What is the depreciation expense on asset Bee for 2018?

41. What is the depreciation expense on asset See for 2018?

42. What is the total carrying value of the remaining machineries as of December 31, 2018?