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The current year’s depreciation expense using the straight-line method and assuming only one depreciable property, is P20,000. What is the machine’s useful life when it was purchased for P200,000 with a salvage value of P20,000?

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Answer:

Machine's useful number of years = 9 years

Explanation:

Using the straight line method, depreciation is calculated as the difference between the cost of the equipment minus the salvage value, all divided by the number of useful years.

Yearly Depreciation

= (Cost - Salvage value) ÷ (Number of useful years)

Yearly depreciation = P20,000

Cost = P200,000

Salvage Value = P20,000

Number of useful years = n

20000 = (200000 - 20000) ÷ n

20000 = (180000/n)

n = (180000/20000) = 9 years

Hope this Helps!!!

User Pere Picornell
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