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Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 11E: On May 10, 2019, Horan Company purchased equipment for 25,000. The equipment has an estimated...
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Question
On 1 Apr 2021 the company purchased a building and a truck for $122,000; a promissory note was signed. The appraisal values are: $96,000 for the building and $24,000 for the truck.
Additional information for adjustments
- To
depreciate the building purchased on 1 April 2021, the company uses the straight-line method over 20 years, with a residual value of $7,600. For the truck purchased on 1 April 2021, the company uses the units-of-production method. The company expects to use it for a total of 140,000 kilometers, with a residual value of $4,400. It was used for 2,800 kilometers in April.
Please prepare
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