On 1 May 20X2, Express Shipping Company (‘ESC’) paid $21,208,600 for land and a warehouse built on it. An appraisal indicated that the land’s fair value was $15,149,000 and the warehouse’s fair value was $11,361,750. ESC estimated that the warehouse can be used for 6 years and will have a salvage value of $250,500. In trying to decide which depreciation method to use for the warehouse, ESC’s management has requested a depreciation schedule of straight-line and double- declining-balance depreciation methods. The fiscal year-end of ESC is 31 December. Required: 1 Prepare a depreciation schedule for the warehouse using the straight-line method showing depreciation expense, accumulated depreciation, and asset book value.
On 1 May 20X2, Express Shipping Company (‘ESC’) paid $21,208,600 for land and a warehouse built on it. An appraisal indicated that the land’s fair value was $15,149,000 and the warehouse’s fair value was $11,361,750. ESC estimated that the warehouse can be used for 6 years and will have a salvage value of $250,500. In trying to decide which
has requested a depreciation schedule of straight-line and double- declining-balance depreciation methods. The fiscal year-end of ESC is 31 December.
Required:
-
1 Prepare a depreciation schedule for the warehouse using the straight-line method showing depreciation expense,
accumulated depreciation , and asset book value.
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