Multiple Choice
Salem Company hired Kirk Construction to construct an office building for ₤8,000,000 on land costing ₤2,000,000, which Salem Company owned.The building was complete and ready to be used on January 1, 2011 and it has a useful life of 40 years.The price of the building included land improvements costing ₤600,000 and personal property costing ₤750,000.The useful lives of the land improvements and the personal property are 10 years and 5 years, respectively.Salem Company uses component depreciation, and the company uses straight-line depreciation for other similar assets.What total amount of depreciation expense would Salem Company report on its income statement for the year ended December 31, 2011?
A) ₤335,000
B) ₤200,000
C) ₤426,250
D) ₤376,250
Correct Answer:
Verified
Correct Answer:
Verified
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