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Swifty Corporation constructed a building at a cost of $29900000. Weighted-average accumulated expenditures were $11500000, actual interest was $1270000, and avoidable interest was $592000. If the salvage value is $2360000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is?

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Respuesta :

TomShelby

Answer:

$ 714,550

Explanation:

straight line depreciation:

[tex]\frac{cost - salvage}{useful \: \:  life}[/tex]

cost    $29,900,000

avoidable interest

AKA interest capitalized through building account $ 592,000

Building posted in the accounting: 30,942,000

salvage value:                                  ( 2,360,000)

amount subject to depreciation      28,582,000

useful life of he building                                   40 years

depreciation per year:                           714,550

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