Exercise 11-13 (Part Level Submission) Marigold Company constructed a building a
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Question
Exercise 11-13 (Part Level Submission)
Marigold Company constructed a building at a cost of $2,486,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value.
In January 2018, a new roof was installed at a cost of $339,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $180,800.
(a)
Exercise 11-13 (Part Level Submission)
Marigold Company constructed a building at a cost of $2,486,000 and occupied it beginning in January 1998. It was estimated at that time that its life would be 40 years, with no salvage value.
In January 2018, a new roof was installed at a cost of $339,000, and it was estimated then that the building would have a useful life of 25 years from that date. The cost of the old roof was $180,800.
Explanation / Answer
All other transactions occurred after 2017 is irrelevant for computation of Depreciation upto 2017
Depreciation per from 1998 to 2017
= Original Cost of Asset- Salvage Value/ Estimated life of Asset
=$2,486,000-0/40
=$2,486,000/40
=$ 62,150
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