E10-12: (Depreciation Computations-SL, SYD, DDB) Montoni Company
purchases equipment on January 1, year 1, at a cost of $ 469,000. The
asset is expected to have a service life of 12 years and a salvage value
of $ 40,000.
Instructions
Complete the amount of depreciation for each years 1 through 3 using
the straight-line depreciation method.
Complete the amount of depreciation for each years 1 through 3 using
the sum-of-the-years’-digits method.
Complete the amount of depreciation for each years 1 through 3 using
the double-declining balance method. (In performing your calculations,
round constant percentage to the nearest one-hundredth of a point
and round answers to the nearest dollar.
E10-27: (Capitalization of Interest) Harrisburg Furniture Company
started construction of a combination office and warehouse building
for its own use at an estimated cost of $ 5,000,000 on January 1, 2008.
Harrisburg expected to complete the building by December 31, 2008.
Harrisburg has the following debt obligations outstanding during the
construction period.
Construction loan-12% interest, payable semiannually, issued
December 31, 2007
$ 2,000,000
Short-term loan-10% interest, payable monthly, and principle
payable