Question
On March 31, 2021, Susquehanna Insurance purchased an office building for $13,200,000. Based on their relative fair values, one-third of the purchase price was
On March 31, 2021, Susquehanna Insurance purchased an office building for $13,200,000. 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 $1,400,000 and $900,000, 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: Residual Value Service Life Building 25 5% of cost Furniture and fixtures 10 Office equipment 5 5% of cost $50,000 Required: Calculate depreciation for 2021 and 2022. (Do not round intermediate calculations.) Answer is complete but not entirely correct. Depreciation 2022 $334,400 2021 Building Furniture and fixtures $ 250,800 $ 210,000 $ 14,000 Office equipment $ 270,000 $ 252,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started