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23 December, 20:30

Mendenhall Corporation constructed a building at a cost of $10,000,000. Weighted-average accumulated expenditures were $4,000,000, actual interest was $400,000, and avoidable interest was $200,000. If the salvage value is $800,000, and the useful life is 40 years, depreciation expense for the first full year using the straight-line method is:

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  1. 23 December, 20:35
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    depreciation expense is $235000

    Explanation:

    Given data

    cost = $10,000,000

    expenditures = $4,000,000

    actual interest = $400,000

    avoidable interest = $200,000

    salvage value = $800,000

    time = 40 year

    to find out

    depreciation expense

    solution

    we know that for 40 year

    so depreciation expense in the 1st year is express as that given below

    depreciation = cost + interest - salvage value / time

    put here all value we get depreciation

    depreciation = 10000000 + 200000 - 800000 / 40

    depreciation = 9400000 / 40

    depreciation = 235000

    so depreciation expense is $235000
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