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Answer:
To determine the balance in the Accumulated Depreciation-Building account for Crane at December 31, 2026, we need to follow these steps:
1. **Calculate the annual depreciation expense using the straight-line method:**
\[
\text{Annual Depreciation Expense} = \frac{\text{Cost of the Building} - \text{Salvage Value}}{\text{Useful Life}}
\]
2. **Determine the total depreciation for the period from October 1, 2025, to December 31, 2026:**
- First, calculate the depreciation for the year 2025 (from October 1 to December 31).
- Then, calculate the depreciation for the full year 2026.
### Step-by-Step Calculation
**1. Calculate the annual depreciation expense:**
\[
\text{Annual Depreciation Expense} = \frac{614,000 - 58,600}{25} = \frac{555,400}{25} = 22,216
\]
**2. Calculate the depreciation for the partial year 2025:**
The building was acquired on October 1, so the depreciation for 2025 will be for 3 months (October, November, December).
\[
\text{Depreciation for 2025} = \text{Annual Depreciation Expense} \times \frac{3}{12} = 22,216 \times \frac{3}{12} = 5,554
\]
**3. Calculate the depreciation for the full year 2026:**
\[
\text{Depreciation for 2026} = \text{Annual Depreciation Expense} = 22,216
\]
**4. Determine the total accumulated depreciation as of December 31, 2026:**
\[
\text{Total Accumulated Depreciation} = \text{Depreciation for 2025} + \text{Depreciation for 2026} = 5,554 + 22,216 = 27,770
\]
Therefore, the balance in the Accumulated Depreciation-Building account after adjusting entries at December 31, 2026, should be **$27,770**.
Explanation:
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