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Question

Alpha Construction acquired the following plant assets on January 5, 2009:

Asset

                                                 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.

 Required:

1. Calculate depreciation for 2009 & 2010 for each of the assets.

a. Office equipment




b. Building 



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?

Top Answer

1.) (a) Office equipment :- Depreciation 2009 = $70,000 Depreciation 2010 = $42,000 (b) Building :-... View the full answer

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