Use the following information to answer the next three questions. On December 31

Question

Use the following information to answer the next three questions. On December 31, 2012, ILC purchased land and a building for $800,000. The land had a fair value of $125,000. The company expects the building to have a useful life of 20 years and a Corporation purchased $43,000 of office equipment on account; the company anticipates the equipment salvage value of $1 5,000. On Decem mber 31, 2013, ILC will be used for 6 years and have a $1,000 salvage value. The office equipment, building and land are the only non-current assets ILC owns. o0o Assuming the ILC Corporation made no new purchases of long-lasting assets, at the end of December, 2014 what entry did ILC Corporation make to equipment? 12. the use of its building and computer A Depreciation Expense B Building Equipment C Accumulated Depreciation D Depreciation Expense Accumulated Depreciation Depreciation Expense Depreciation Expense Building and Equipment $40,000 S33,000 $33,000 $40,000 $40,000 33,000 None of the Above 13. At the end of December, 2014, what was the balance in the ILC Corporation Building and Equipment account? a. $800,000+$40,000 b. $800,000-$125,000+$43,000 c. $800,000+$43,000-$40,000 d. $800,000- $125,000+ $43,000-$3,000- $40,000 e. None of the above

Explanation / Answer

12) building value = 800,000-125,000 675000 depreciation expense (675,000-15000)/20 33000 Computer =(43000-1000)/6 7000 option A is the correct answer Depreciation expense 40,000 Accumulated depreciation 40,000 13) building original value 675,000 dep 2013*2014 (33000*2)= 66000 so correct option is option d 800000-125000+43000-33000-40000

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