Alpha Construction acquired the following plant assets on January 5, 2009:
Asset Cost Residual Value Useful Life
Cost Residual Value Useful Life
Office equipment $175,000 $15,000 5 years
Building $300,000 $20,000 25 years
Alpha Construction uses the double declining balance method to depreciate the office equipment & the straight-line method to depreciate the building.
1. Calculate depreciation for 2009 & 2010 for each of the assets.
a. Office equipment
2. Assume the building was sold at the June 21 of 2010 for $210,000. Determine whether the company will realize any gain or loss from the sale. How would the sale be reported in the statement of cash flow?
1.) (a) Office equipment :- Depreciation 2009 = $70,000 Depreciation 2010 = $42,000 (b) Building :-... View the full answer