Sunland Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $9,000,000 on January 1, 2025. Sunland expected to complete the building by December 31, 2025. Sunland has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2024 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2026 Long-term loan-11% interest, payable on January 1 of each year: principal payable on January 1, 2029 (a) (b) Compute the depreciation expense for the year ended December 31, 2026. Sunland elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $540,000. (Round answer to O decimal places, e.g. 5,275.) Depreciation expense $3,600,000 2,700,000 1,800,000 $
Sunland Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $9,000,000 on January 1, 2025. Sunland expected to complete the building by December 31, 2025. Sunland has the following debt obligations outstanding during the construction period. Construction loan-12% interest, payable semiannually, issued December 31, 2024 Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2026 Long-term loan-11% interest, payable on January 1 of each year: principal payable on January 1, 2029 (a) (b) Compute the depreciation expense for the year ended December 31, 2026. Sunland elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $540,000. (Round answer to O decimal places, e.g. 5,275.) Depreciation expense $3,600,000 2,700,000 1,800,000 $
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
Problem 6P
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