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What value should be allocated to the building

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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?

Reference no: EM132447228

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