Norman Freight purchased a building for $1,100,000 and depreciated it on a straight-line basis over a 30-year period. The estimated residual value was $140,000. After using the building for 15 years, Norman realized that wear and tear on the building would force the company to replace it before 30 years. Starting with the sixteenth year, Norman began depreciating the building over a revised total life of 25 years and increased the estimated residual value to $215,000. Record depreciation expense on the building for years 15 and 16.
Answer to relevant QuestionsOn January 2, 2012, Sparkle Lighting purchased showroom fixtures for $20,000 cash, expecting the fixtures to remain in service for 10 years. Sparkle Lighting has depreciated the fixtures on a straight-line basis, with zero ...Bibeau Mining paid $885,000 for the right to extract mineral assets from a 900,000-ton mineral deposit. In addition to the purchase price, Bibeau Mining also paid a $500 filing fee, a $1,500 license fee to the state of ...Grace Medical Center bought equipment on January 2, 2012, for $27,000. The equipment was expected to remain in service for 4 years and to perform 1,000 operations. At the end of the equipment’s useful life, Grace estimates ...At the end of 2012, Zepher, Corp., had total assets of $13 million and total liabilities of $11 million. Included in the assets were property, plant, and equipment with a cost of $10 million and accumulated depreciation of ...Marsellus Manufacturing incurred the following costs in acquiring land, making land improvements, and constructing and furnishing a new building.a. Purchase price of four acres of ...
Post your question