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Neuber Company self-constructed a building during 2022 using $15 million of materials, $25 million of direct labor, and $10 million of overhead (heat, light,
Neuber Company self-constructed a building during 2022 using $15 million of materials, $25 million of direct labor, and $10 million of overhead (heat, light, and power). Neuber borrowed $40 million as a construction loan with a 5% interest rate on January 1, 2022. a. Provide a detailed analysis of the self-constructed building's book value at December 31, 2022. Assume that the building's book value is $60 million on January 1, 2023. The building had estimated useful life of 50 years and $10 million estimated salvage value. The firm uses the straight-line depreciation method. b. Record depreciation for the year ended December 31, 2023. On January 1, 2025, Neuber discovers that the building (in b above) will have a total useful life of 25 value of $5 million. c. Record depreciation for the year ending December 31, 2025. years and salvage
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