On March 31, 2021, Susquehanna Insurance purchased an office building for $12,600,000. Based on their relative...

 

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On March 31, 2021, Susquehanna Insurance purchased an office building for $12,600,000. Based on their relative fair values, one-third of the purchase price was allocated to the land and two-thirds to the building. Furniture and fixtures were purchased separately from office equipment on the same date for $1,380,000 and $880,000, respectively. The company uses the straight-line method to depreciate its buildings and the double-declining-balance method to depreciate all other depreciable assets. The estimated useful lives and residual values of these assets are as follows: Building Furniture and fixtures office equipment Building Furniture and fixtures Office equipment Service Life 40 20 10 2021 Required: Calculate depreciation for 2021 and 2022. (Do not round intermediate calculations.) Residual Value 10% of cost 10% of cost $48,000 Depreciation 2022 On March 31, 2021, Susquehanna Insurance purchased an office building for $12,600,000. Based on their relative fair values, one-third of the purchase price was allocated to the land and two-thirds to the building. Furniture and fixtures were purchased separately from office equipment on the same date for $1,380,000 and $880,000, respectively. The company uses the straight-line method to depreciate its buildings and the double-declining-balance method to depreciate all other depreciable assets. The estimated useful lives and residual values of these assets are as follows: Building Furniture and fixtures office equipment Building Furniture and fixtures Office equipment Service Life 40 20 10 2021 Required: Calculate depreciation for 2021 and 2022. (Do not round intermediate calculations.) Residual Value 10% of cost 10% of cost $48,000 Depreciation 2022

Answer rating: 100% (QA)

Building 12600000 23 8400000 Depreciation as per Straight line method Service life 40 years Residual ... View the full answer