For each of the independent situations below,determine the age of the asset in question.All assets were acquired at the beginning of the year.
a.The balance in the Buildings account is $400,000 while the balance sheet shows the book value of the buildings at $217,600.The notes to the financial statements indicate that straight-line depreciation is used for all property,plant,and equipment and that residual values are estimated at 5% of cost.The estimated life of the buildings is 25 years.
b.The book value of the delivery equipment is $51,520.The cost of the delivery equipment was $80,500.The company uses the straight-line method of depreciation for delivery equipment and estimates life at 5 years or 50,000 units.So far,27,000 units have been produced.Residual value is 10% of cost.
c.The balance in the Accumulated Depreciation account for furniture is $21,875.The furniture has been amortized a total of 43.75% of its original cost.The company's notes to the financial statements indicate that double-declining-balance depreciation is used for all furniture.The company estimates useful life at 8 years and residual value at 20% of cost.
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