(Learning Objectives 1, 3: Measure and account for the cost of plant assets; measure and record…

(Learning Objectives 1, 3: Measure and account for the cost of plant assets; measure and record…

(Learning Objectives 1, 3: Measure and account for the cost of plant assets; measure and record depreciation under DDB) Maddison Lake Resort reported the following on its balance sheet at December 31, 2014:

In early July 2015, the resort expanded operations and purchased additional equipment for cash at a cost of $135,000. The company depreciates buildings by the straight-line method over 20 years with residual value of $85,000. Due to obsolescence, the equipment has a useful life of only 10 years and is being depreciated by the double-declining-balance method with zero residual value.

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