Salem Company hired Kirk Construction to construct an office building for £6400000 on land costing £1600000 which Salem Company owned. The building was complete and ready to be used on January 1 2017 and it has a useful life of 40 years. The price of the building included land improvements costing £480000 and personal property costing £600000. The useful lives of the land improvements and the personal property are 10 years and 5 years respectively. Salem Company uses component depreciation and the company uses straight-line depreciation for other similar assets. What is the net amount reported for the building on Salem Company's December 31 2017 statement of financial position?

Question

Quizplus · Accepted Answer

The Answer of Salem Company hired Kirk Construction to construct an office building for £6400000 on land costing £1600000 which Salem Company owned. The building was complete and ready to be used on January 1 2017 and it has a useful life of 40 years. The price of the building included land improvements costing £480000 and personal property costing £600000. The useful lives of the land improvements and the personal property are 10 years and 5 years respectively. Salem Company uses component depreciation and the company uses straight-line depreciation for other similar assets. What is the net amount reported for the building on Salem Company's December 31 2017 statement of financial position?

Salem Company Hired Kirk Construction to Construct an Office Building