Chapter 17.I, Problem 10RE

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8th Edition

Robert Brechner + 1 other

ISBN: 9781305585447

Textbook Problem

White Mountain Supply Company purchases warehouse shelving for $18,600. Shipping charge were $370. and assembly and setup amounted to $575. The shelves are expected to last for 7 years and have a scrap value of $900. Using the straight-line method of depreciation.

a. What is the annual depreciation expense of the shelving?

b. What is the accumulated depreciation after the third year?

c. What is the book value of the shelving after the fifth year?

**(a)**

To determine

**To calculate:** The annual depreciation of the warehouse shelving when the warehouse shelving purchased cost is

Explanation

**Given Information:**

The cost of the warehouse shelving is

**Formula used:**

The steps to calculate annual depreciation by straight line method are as follows:

Step 1: Calculate the total cost.

Step 2: Calculate the total amount of depreciation by subtracting salvage value from the total cost by using the formula,

Step 3: Calculate the annual depreciation by dividing estimated useful life from the total amount of depreciation given by the formula,

**Calculation:**

Consider the provided cost of warehouse shelving is

**(b)**

To determine

**To calculate:** The accumulated depreciation after third year of the warehouse shelving when the warehouse shelving purchased cost is

**(c)**

To determine

**To calculate:** The book value after the fifth year of the warehouse shelving when the warehouse shelving purchased cost is

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