For Each of the Independent Situations Below,determine the Age of the Asset

question 88

Essay

For each of the independent situations below,determine the age of the asset in question.All assets were acquired at the beginning of the years.
a.The balance in the buildings account is $400,000; while the balance sheet shows the book value of the buildings at $217,600.The notes to the financial statements indicate that straight-line depreciation is used for all plant assets and that residual values are estimated at 5% of cost.The estimated life of the buildings is 25 years.
b.The book value of delivery equipment is $51,520.The cost of the delivery equipment was $80,500.The company uses the straight-line method of depreciation for delivery equipment and estimates life at 5 years or 50,000 units.So far,27,000 units have been produced.Residual value is 10% of cost.