Reference no: EM132730727

Problem 1: Which of the following is included in the cost of constructing a building?

(a) cost of paving a parking lot
(b) cost of grading the land on which the building is to be constructed
(c) interest costs on a building loan incurred during construction
(d) cost of removing a demolished old building that existed on the land when it was purchased

Problem 2: Quinto Ltd. purchased factory equipment for $200,000, and estimated that the equipment will have a $20,000 residual value at the end of its estimated 5-year useful life. If uses the double diminishing-balance method of depreciation, the depreciation expense for the second year after purchase would be:

(a) $43,200.
(b) $48,000.
(c) $72,000.
(d) $80,000.