Shahia Company bought a building for $87,000 cash and the land on which it was located for $123,000 cash. The company paid transfer costs of $15,000 ($6,000 for the building and $9,000 for the land). Renovation costs on the building before it could be used were $32,000. 1. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $18,000 estimated residual value. 2. Determine the net book value of the property (land and building) at the end of year 2. Please follow the format
Shahia Company bought a building for $87,000 cash and the land on which it was located for $123,000 cash. The company paid transfer costs of $15,000 ($6,000 for the building and $9,000 for the land). Renovation costs on the building before it could be used were $32,000. 1. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $18,000 estimated residual value. 2. Determine the net book value of the property (land and building) at the end of year 2. Please follow the format
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Shahia Company bought a building for $87,000 cash and the land on which it was located for $123,000 cash. The company paid transfer costs of $15,000 ($6,000 for the building and $9,000 for the land). Renovation costs on the building before it could be used were $32,000.
1. Compute straight-line depreciation at the end of one year, assuming an estimated 10-year useful life and a $18,000 estimated residual value.
2. Determine the net book value of the property (land and building) at the end of year 2.
Please follow the format
Transcribed Image Text:. Determine the net book value of the property (land and building) at the end of year 2.
lote: Amounts to be deducted should be indicated by a minus sign.
Net book value of property at end of Year 2
Building
Accumulated depreciation
Land
Net book value
$
0
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