Question 1:

Equipment with a cost of $160 000, an estimated residual value of $40 000 and an estimated life of 15 years was depreciated by the straight-line method for 4 years.

Due to obsolescence, it was determined that the useful life should be shortened by 3 years and the residual value changed to zero.

The depreciation expense for the current and future years is:

Choices:

-$11,636

-$16,000

-$11,000

-$8,000

Question 2:

Which of the following is included in the cost of constructing a building?

Choices:

-Insurance costs during construction

-The purchase of the delivery truck used to deliver construction materials

-Cost of repairing vandalism damage during construction

-Cost of removing the demolished building existing on the land when it was purchased