Teness construction negotiates a lump-sum purchase of

Assignment Help Accounting Basics

Reference no: EM13597261

Teness Construction negotiates a lump-sum purchase of several assets from a company that is going out of business.The purchase is completed on January 1, 2009, at a total cash price of $900,000 for a build- ing, land, land improvements, and four vehicles.The estimated market values of the assets are building, $514,250; land, $271,150; land improvements, $65,450; and four vehicles, $84,150.The company's fiscal year ends on December 31.

Required:

1. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase.

2. Compute the depreciation expense for year 2009 on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value.

3. Compute the depreciation expense for year 2009 on the land improvements assuming a five-year life and double-declining-balance depreciation.

Reference no: EM13597261

Questions Cloud

Why is the distinction between deductions for agi and : why is the distinction between deductions for agi and deductions from agi important for individuals?al capones

Vincent pays 20000 for equipment to use n his trade or : 1 vincent pays 20000 for equipment to use n his trade or business. he pays sales tax of 800 as a result of the

On july 1 2004 harper company signed a contract to lease : on july 1 2004 harper company signed a contract to lease space in a building for 15 years. the lease contract calls for

When the transition team was formed several team-building : research the case planned change at the san diego county regional airport authority.then answer the following three

Teness construction negotiates a lump-sum purchase of : teness construction negotiates a lump-sum purchase of several assets from a company that is going out of business.the

Auto delivery company has a fleet of several delivery : auto delivery company has a fleet of several delivery trucks. in the past auto delivery had followed the policy of

You complete the audit of munich department store and in : you complete the audit of munich department store and in your opinion the financial statements are fairly presentd. on

Dotsero technology inc has a job-order costing system the : dotsero technology inc. has a job-order costing system. the company uses predetermined overhead rates iin apply

How much income before income taxes would be reported if : stanley corporation produces a single product. the following is a cost structure applied to its first year of

User Account

All Pages