Reference no: EM132447228
Questions -
Q1. 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
|
30,000
|
|
Equipment
|
40,000
|
Bowie paid $70,000 cash for the lump sum purchase. What value should be allocated to the building?
Q2. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $15,000 for the truck. The truck is expected to have a $3,500 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?
Q3. Cambridge Company purchased a truck on January 1, 2018. Cambridge paid $20,000 for the truck. The truck is expected to have a $2,000 residual value and a 6-year life. Cambridge has a December 31 fiscal year end. Using the straight-line method, how much is the 2019 depreciation expense?
Q4. Somerset Company acquired a piece of equipment with a list price of $200,000 for $178,000. Freight to Somerset's location was $8,000. Installation and testing costs were $8,500. An old piece of equipment was scrapped as a result of this new purchase. The old piece of equipment had an undepreciated value (net book value) of $8,000. The new piece of equipment is expected to have a 10 year life and a salvage value of $15,000. What is the total value assigned to the new piece of equipment?