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On March 31, 2024, Susquehanna Insurance purchased an office building for $12,000,000. 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 $1,360,000 and $860,000, 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 Service Life 30 20 10 Residual Value 10% of cost 10% of cost $ 46,000 Required: 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 $12,000,000. 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 $1,360,000 and $860,000, 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 Service Life 30 20 10 Residual Value 10% of cost 10% of cost $ 46,000 Required: 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)?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ces On March 31, 2024, Susquehanna Insurance purchased an office building for $12,000,000. 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 $1,360,000 and $860,000, 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 1 Required 2 Service Life Required: 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)? Building Furniture and fixtures Office equipment 30 20 10 Complete this question by entering your answers in the tabs below. $ $ Calculate depreciation for the years ended December 31, 2024 and 2025. Note: Do not round intermediate calculations. Depreciation 2024 Residual Value 10% of cost 10% of cost $ 46,000 180,000 102,000 2025 < Required 1 Required 2 >
Transcribed Image Text:ces On March 31, 2024, Susquehanna Insurance purchased an office building for $12,000,000. 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 $1,360,000 and $860,000, 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 1 Required 2 Service Life Required: 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)? Building Furniture and fixtures Office equipment 30 20 10 Complete this question by entering your answers in the tabs below. $ $ Calculate depreciation for the years ended December 31, 2024 and 2025. Note: Do not round intermediate calculations. Depreciation 2024 Residual Value 10% of cost 10% of cost $ 46,000 180,000 102,000 2025 < Required 1 Required 2 >
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