question archive On March 31, 2016, Susquehanna Insurance purchased an office building for $13,200,000

On March 31, 2016, Susquehanna Insurance purchased an office building for $13,200,000

Subject:AccountingPrice: Bought3

On March 31, 2016, 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:

  Service
Life
Residual
Value
  Building 25             5% of cost
  Furniture and fixtures 10             5% of cost
  Office equipment 5             $50,000
 
Required:

Calculate depreciation for 2016 and 2017. (Do not round intermediate calculations.)

Depreciation 2016 2017

Building

Furniture and Fixtures

Office Equipment

pur-new-sol

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