Find how is the cost of a lump-sum purchase allocated

Assignment Help Accounting Basics

Reference no: EM132714877

Question 1: How is the cost of a lump-sum purchase allocated to the individual assets acquired? Provide a simple example of how the allocation would be performed if your company paid $1,000,000 cash in total for a restaurant (land, building, and equipment), and the appraised value was actually $1,200,000 for the 3 asset components $400,000, $500,000, and $300,000, respectively.

Question2: Does the balance in the Accumulated Depreciation - Machinery account represent funds to replace the machinery when it wears out? If not, what does it represent?

Question 3: Assume you work for a company in sales and therefore are entitled to not only hourly pay, but commission and bonus as well. You work 40 hours in a payroll week. Calculate your gross pay for your company if you make $x per hour (you select your rate!), earn a 5% bonus (of gross pay), and earn 10% commission (of gross pay).

Question 4: Unfortunately, you do not get to keep all your Gross Pay. Assuming you have the following withholding deductions taken out of your pay, now calculate your Net Pay.

Withholding deductions:

Employee income tax (20%)

Employee OASDI tax (see book for how to calculate)

Employee Medicare tax (1.45%)

Employee health insurance 75

Employee contribution to United Way 20

Total withholdings:

Reference no: EM132714877

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