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    Activity 1: Exercise in Asset Valuation Methods The Case of Aling Marites

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    Benigno V. Soriano Jr.
    Marites owns various farming assets that need to be valued for accounting purposes. The appropriate valuation methods are: - Ten bags of fertilizer bought for ₱1,300 per bag have a book value of ₱13,000 using cost price valuation. - Twenty cavans of palay set aside for home consumption have a market value of ₱15,000 using current market price valuation. - A thresher bought in 2016 for ₱175,000 with a 15 year lifespan has accumulated depreciation of ₱111,142.46 and a book value of ₱63,857.54 as of December 2020 using the diminishing balance method.

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    Activity 1: Exercise in Asset Valuation Methods The Case of Aling Marites

    Uploaded by

    Benigno V. Soriano Jr.
    17 views3 pages
    Marites owns various farming assets that need to be valued for accounting purposes. The appropriate valuation methods are: - Ten bags of fertilizer bought for ₱1,300 per bag have a book value of ₱13,000 using cost price valuation. - Twenty cavans of palay set aside for home consumption have a market value of ₱15,000 using current market price valuation. - A thresher bought in 2016 for ₱175,000 with a 15 year lifespan has accumulated depreciation of ₱111,142.46 and a book value of ₱63,857.54 as of December 2020 using the diminishing balance method.

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    Marites owns various farming assets that need to be valued for accounting purposes. The appropriate valuation methods are: - Ten bags of fertilizer bought for ₱1,300 per bag have a book value of ₱13,000 using cost price valuation. - Twenty cavans of palay set aside for home consumption have a market value of ₱15,000 using current market price valuation. - A thresher bought in 2016 for ₱175,000 with a 15 year lifespan has accumulated depreciation of ₱111,142.46 and a book value of ₱63,857.54 as of December 2020 using the diminishing balance method.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    17 views3 pages

    Activity 1: Exercise in Asset Valuation Methods The Case of Aling Marites

    Uploaded by

    Benigno V. Soriano Jr.
    Marites owns various farming assets that need to be valued for accounting purposes. The appropriate valuation methods are: - Ten bags of fertilizer bought for ₱1,300 per bag have a book value of ₱13,000 using cost price valuation. - Twenty cavans of palay set aside for home consumption have a market value of ₱15,000 using current market price valuation. - A thresher bought in 2016 for ₱175,000 with a 15 year lifespan has accumulated depreciation of ₱111,142.46 and a book value of ₱63,857.54 as of December 2020 using the diminishing balance method.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Precious Anne N.

    Reutotar

    BSA IVB - Major in Crop Science

    Activity 1: Exercise in Asset Valuation Methods

    The Case of Aling Marites

    1. Identify the appropriate valuation method that Marites can use for her asset items and
    write down their corresponding book value as of December 31, 2020.

    a. Ten bags of complete fertilizer bought at the start of season at ₱1,300.00 / bag.

    10 bags x ₱1,300.00 = ₱13,000.00

    b. Twenty Cavans of palay set aside for home consumption


    (Note: 1 Cavan =50 kgs, market price ₱15.00 per kg)

    20 Cavans x 50 kgs = 1,000 kgs x ₱15.00 = ₱15,000.00

    2. Determine the accumulated depreciation as of December 31,2021 of thresher bought


    by Marites on July 1, 2016 at ₱175,000.00 with a life span of 15 years, depreciation
    rate of 6.5% annually, and salvage of 10% of acquisition cost.

    Given: AC = ₱175,000.00 SV =10% DR =6.5% DP/YR = ₱11,375.00

    Valuation Method = DBM

    AC −SV
    DP/YR =
    LP
    ₱ 175,000.00−10 %
    =
    15
    = ₱15,750.00
    = ₱1,050.00
    Year Deprn/Yr Accum Deprn Book Value
    1 11,375.00 11,375.00 163,625.00
    2 10,635.63 22,010.63 152,989.38
    3 9,944.31 31,954.93 143,045.07
    4 9,297.93 41,252.86 133,747.14
    4&5 875/month 45,867.50 129,132.50
    5 8,693.56 49,946.43 125,053.57
    6 8,128.48 58,074.91 116,925.09
    7 7,600.13 65,675.04 109,324.96
    8 7,106.12 72,781.16 102,218.84
    9 6,644.22 79,425.39 95,574.61
    10 6,212.35 85,637.74 89,362.26
    11 5,808.55 91,446.28 83,553.72
    12 5,430.99 96,877.28 78,122.72
    13 5,077.98 101,955.25 73,044.75
    14 4,747.91 106,703.16 68,296.84
    15 4,439.29 111,142.46 63,857.54

    3. Determine the book value as December 31, 2020 of a transplanter bought on October
    1, 2018 at the cost of ₱200,000.00 and is expected to last for seven years.

    AC −SV
    DP/YR =
    LP

    ₱ 200,00.00−0
    =
    7

    =₱28,571.42

    Year Deprn/ Yr Accum Deprn Book Value


    1 28,571.42 28,571.42 171,428.57
    2 28,571.43 57,142.85 142,857.15
    2 & 3 months 4,761.91 61,904.77 138,095.24
    3 28,571.43 85,714.28 114,285.72
    4 28,571.43 114,285.71 85,714.29
    5 28,571.43 142,857.14 57,142.86
    6 28,571.43 171,428.57 28,571.43
    7 28,571.43 200,000 0.00

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