Question
Q1. John purchased a building and the land it is on for $101,000, to house its repair facilities and to store computer equipment. The lot
Q1. John purchased a building and the land it is on for $101,000, to house its repair facilities and to store computer equipment. The lot on which the building is located is valued at $16,000. The balance of the cost is to be allocated to the building. Byte made a cash down payment of $10,100 and executed a mortgage for the balance. The mortgage is payable in eight equal annual installments beginning July 1. The annual interest rate on the mortgage payable was 9.25 percent. Interest expense for one-half month should be computed because the building and land were purchased, and the liability incurred on June 16.
Q2. The annual interest rate on the mortgage payable was 9.25 percent. Interest expense for one-half month should be computed because the building and land were purchased, and the liability incurred on June 16.
Q2.
he fixed assets have estimated useful lives as follows:
Building - 31.5 years
Computer Equipment - 5.0 years
Office Equipment - 7.0 years
Use the straight-line method of depreciation. Management has decided that assets purchased during a month are treated as if purchased on the first day of the month. The buildings scrap value is $7,000. The office equipment has a scrap value of $300. The computer equipment has no scrap value. Calculate the depreciation for one month.
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