(10 points each)

DIRECTIONS: SOLVE THE FOLLOWING PROBLEMS SHOWING FULL ANSWER

1. Consider the following data on a car:

Cost basis of the asset, CO = BD 10,000

Useful life, N = 5 years

Estimated Salvage value, CL = BD 2,000

Compute the annual depreciation allowances and the resulting book values. Using straight line method.

1. Consider the following data on a car:

Cost basis of the asset, CO = BD 5423

Useful life, N = 2 years

Estimated Salvage value, CL = BD 2,000

Interest rate, i = 15%

Compute the annual depreciation allowances and the resulting book values. Using sinking fund method.

1. Calculate the annual depreciation and book value of the construction equipment using declining balance method. The interest rate is 8% per year. Co= BD 3,500,000 - Sv = BD 500,000 n = 10 years.