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hram777 [196]
3 years ago
12

Last year, a corporation purchased an office building for $220,000, of which $30,000 was allocated to the land on which the buil

ding was locateD. The building's salvage value was estimated to be $50,000. The corporation's current year depreciation deduction for the building is:
Business
1 answer:
Alex_Xolod [135]3 years ago
5 0

Answer:

$4872

Explanation:

Given: Purchase price of an office building= $220000.

           Out of cost building, $30000 was allocated to the land.

Remember, As per current US Tax code, commercial building can be depreciated over 39-year straight-line for commercial property.

Now, calculating the current year depreciation deduction.

We know, land is not depreciable.

∴ Cost of building= Purchase\ price\ of\ building - cost\ of\ land

⇒ Cost of building= \$ 220000 - \$ 30000

∴ Cost of building= \$ 190000

Next calculating depreciation using straight line method ignoring salvage value.

Depreciation deduction= \frac{\$ 190000}{39}

∴ Depreciation deduction= \$ 4872

Hence, The corporation's current year depreciation deduction for the building is $4872

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3 years ago
Teller, a calendar year company, purchased merchandise from TechCom on November 1 of the current year. TechCom accepted Teller's
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Answer:

Dr Interest Receivable $240

Cr       Interest Income             $240

Explanation:

The reason is that the Techcom company is lender and must account the lending as a loan.

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Dr Interest Receivable $240

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3 years ago
“A business organization requires both long term and short term capital which can
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Answer:

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