Question: XYZ Incorporated a public company has a building it purchased

XYZ Incorporated, a public company, has a building it purchased for $ 400,000. It is estimated the building has a useful life of 25 years and zero residual value. The building has three major components. XYZ uses the straight- line method of depreciation.

1. What is the amount of depreciation in year one? Provide the journal entry.
2. What would be the impact if component A was a major spare part that was replaced at the end of the fourth year instead of year five? The new major spare part had a cost of $ 100,000. Provide the journalentry.
View Solution:

Sale on SolutionInn
  • CreatedFebruary 17, 2015
  • Files Included
Post your question