Counting Crows make the following construction-related expenditures: 450,000 on January 1st, 2021 300,000 on October 1st, 2021 600,000 on December 1st, 2021 200,000 on March 1, 2022, and construction ends on March 31, 2022. They have a 300,000 construction loan at 6 percent. In addition, they have a 1,000,000 loan at 4 percent and a 3,000,000 at 5 percent. How much depreciation expense do they recognize in 2022 if the company uses straight-line depreciation, begins as soon as construction is finished, and the building has a 30-year useful life and a residual value of 200,000?
Counting Crows make the following construction-related expenditures: 450,000 on January 1st, 2021 300,000 on October 1st, 2021 600,000 on December 1st, 2021 200,000 on March 1, 2022, and construction ends on March 31, 2022. They have a 300,000 construction loan at 6 percent. In addition, they have a 1,000,000 loan at 4 percent and a 3,000,000 at 5 percent. How much depreciation expense do they recognize in 2022 if the company uses straight-line depreciation, begins as soon as construction is finished, and the building has a 30-year useful life and a residual value of 200,000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Counting Crows make the following construction-related expenditures:
450,000 on January 1st, 2021
300,000 on October 1st, 2021
600,000 on December 1st, 2021
200,000 on March 1, 2022, and construction ends on March 31, 2022.
They have a 300,000 construction loan at 6 percent. In addition, they have a 1,000,000 loan at 4 percent and a 3,000,000 at 5 percent. How much depreciation expense do they recognize in 2022 if the company uses straight-line depreciation, begins as soon as construction is finished, and the building has a 30-year useful life and a residual value of 200,000?
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