This is one continuous problem with 10 questions and an extra credit opportunity. The extra credit should be submitted as an excel spreadsheet showing all of your work, by 9AM tomorrow morning. Label it: YOUR LAST NAME space Your First Initial space QUIZ ONE EC. Improper labels will be rejected.
You purchased a property for $1,000,000. Twenty percent of the purchase price represents land. The depreciable life of the asset is 40 years.
Questions
Solution:- Given in Question-
Property Price = $10,00,000
Land Price = 20% of $10,00,000
Land Price = $2,00,000
Life = 40 Years
To Calculate Amount of Purchase To be Depreciated-
Amount for Depreciation = Property Price - Land Price
Amount for Depreciation = $10,00,000 - $2,00,000
Amount for Depreciation = $8,00,000.
The correct Answer is point C i.e. $8,00,000.
Note- Land Amount is not depreciated because Land has infinite life.
To Calculate depreciation each year -
Depreciation Amount =
Depreciation Amount =
Depreciation Amount = $20,000
The correct Answer is point B i.e. $20,000.
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