Land - Php10,000, Salvage Value - 1,000, Useful Life 9 years. How much is the Depreciable Amount?
Question
Land - Php10,000,
Salvage Value - 1,000,
Useful Life 9 years.
How much is the Depreciable Amount?
Solution
The depreciable amount of an asset is the cost of an asset or other amount substituted for cost, less its residual value. It is the amount of the asset that is subject to depreciation.
Here's how to calculate it:
Step 1: Determine the cost of the asset. In this case, the cost of the land is Php10,000.
Step 2: Determine the salvage value of the asset. The salvage value is the estimated resale value of an asset at the end of its useful life. In this case, the salvage value is Php1,000.
Step 3: Subtract the salvage value from the cost of the asset.
So, Php10,000 (cost of the asset) - Php1,000 (salvage value) = Php9,000.
Therefore, the depreciable amount of the land is Php9,000.
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