Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000.The estimated market values of the purchased assets are building, $427,800; land, $241,,800; land improvements, $37,200; and four vehicles, $223,200
Compute the first year depreciation expense on the land improvements assuming a five year and double declining balance depreciation
Depreciation expense on land improvements?
Answer
A |
Cost |
$ 32,400.00 |
B |
Residual Value |
$ - |
C=A - B |
Depreciable base |
$ 32,400.00 |
D |
Life [in years] |
5 |
E=C/D |
Annual SLM depreciation |
$ 6,480.00 |
F=E/C |
SLM Rate |
20.00% |
G=F x 2 |
DDB Rate |
40.00% |
>First Year Depreciation Expense = $ 32,400 x 40% = $ 12,960 Answer
Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash...
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