On March 31, 2024, Susquehanna Insurance purchased an office building for $11,100,000. 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 $1,330,000 and $830,000, 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 Required: Service Life 25 Residual Value 5% of cost 20 5% of cost 10 $ 43,000 1. Calculate depreciation for the years ended December 31, 2024 and 2025. 2. What book values would be reported in the December 31, 2025, balance sheet (including land)?

On March 31, 2024, Susquehanna Insurance purchased an office building for $11,100,000. 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 $1,330,000 and $830,000, 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 Required: Service Life 25 Residual Value 5% of cost 20 5% of cost 10 $ 43,000 1. Calculate depreciation for the years ended December 31, 2024 and 2025. 2. What book values would be reported in the December 31, 2025, balance sheet (including land)?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 55P

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