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a company acquired a warehouse for $500,000, which it expects to use for 25 years with an estimated residual value of $100,000 at the end of that time. if the company employs the half-year convention, how much is depreciation expense for the year of acquisition?

Respuesta :

$8,000 is the amortization expense for the year ended December 31, 2022 if a company acquired a warehouse for $500,000.

( acquired cost -  estimated residual value) / time = amortization expense

if the company employs the half-year convention,

{( acquired cost -  estimated residual value) / time}/2  = amortization expense

Hence,

($500,000-$100,000)/25=$16,000)/2=$8,000

$8,000 is the amortization expense for the year ended December 31, 2022.

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