Reference no: EM132385526

Question

Part A)

Bowie Company made a lump sum purchase of land, building, and equipment. The following were the appraised values of each element:

PP&E Element  Amount

Land   $15,000

Building 25,000

Equipment 40,000

Bowie paid $70,000 cash for the lump sum purchase. What value should be allocated to the building? (Enter only whole dollar values.)

Part B)

Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $23,000 for the truck. The truck is expected to have a $3,000 residual value and a 5-year life. Cambridge has a December 31 fiscal year end. Using the double-declining balance method, how much is the 2019 depreciation expense? (Enter only whole dollar values.) Hint: what is the year 2 depreciation amount?

Part C)

Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $25,000 for the truck. The truck is expected to have a $2,500 residual value and a 7-year life. Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense? (Enter only whole dollar values.)