Reference no: EM132855859

Question - Dizon Company, a furniture wholesaler, acquired new equipment at a cost of P 1,500,000 at the beginning of the fiscal year. The equipment has an estimated life of 5 years and an estimated residual value of P 120,000. Elaine Dizon, the president, has requested information regarding alternative depreciation methods. Required: a. Determine the annual depreciation for each of the five years of estimated useful life of the equipment, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by: 0 Straight-line method 0 Declining-balance method (at twice the straight-line rate) b. Assume that the equipment was depreciated under the declining-balance method. In the first week of the fifth year, the equipment was traded in for similar equipment priced at P 1,750,000. The trade-in allowance on the old equipment was P 100,000 and cash was paid for the balance. Journalize the entry to record the exchange.