Huffman Corporation constructed a building at a cost of $20,000,000.Average accumulated expenditures were $8,000,000, actual interest was $1,200,000, and avoidable interest was $600,000.If the salvage value is $1,600,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is

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Quizplus · Accepted Answer

The straight-line depreciation method calculates depreciation by subtracting the salvage value from the cost and dividing by the useful life. So, ($20,000,000 - $1,600,000) / 40 = $475,000.

Huffman Corporation Constructed a Building at a Cost of $20,000,000