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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:

Respuesta :

Answer:

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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