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Question - Kramer Company just built a new warehouse at a cost of $600,000. The salvage value is $20,000 with a life of 40 years.
Required -
1. What is the carrying value of the warehouse at the end of 40 years?
2. Assume that Kramer Company uses double declining balance, the warehouse was put into service on January 1, 2021 and it is now 12/31/2021. Calculate depreciation expense for 2021, the first year of use.
3. Continue your work from item 2. Calculate depreciation expense for 2022, the second year of use.
4. Now assume that Kramer uses straight line to depreciate the building for its entire life. Calculate the total depreciation expense for the building over its entire 40 year useful life.
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