Laramie Company has acquired a property that included both land and a building for $600,000. The company hired an appraiser who has determined that the market value of the land is $370,000 and that of the building is $400,000. At what amount should the company record the cost of the building? (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Laramie Company has acquired a property that included both land and a building for
The company hired an appraiser who has determined that the market value of the land is
and that of the building is
At what amount should the company record the cost of the building? (Round any intermediate calculations to two decimal places and your final answer to the nearest dollar.)
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