Straight line depreciation
Not what you're looking for?
Fundamental Accounting Principals, 18th Edition
Wild, Larson, Chiappetta, McGraw-Hill Irwin
Problem 10-1B: Plant asset costs; depreciation methods.
Nagy Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January1, 2008, at a total cash price of $1,800,000 for a building, land, land improvements, and five trucks. The estimated market value of the assets are building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600. 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 2008 on the building using the straight-line method, assuming a 12-year life and a $120.00 salvage value.
3. Compute the depreciation expense for the year 2008 on the land improvements assuming a 10-year life and a double-declining-balance depreciation.
4. Accelerated depreciation results in payment of more taxes over an assets life. Why is this so?
Purchase this Solution
Solution Summary
The solution explains how to calculate depreciation using the straight line method.
Solution Preview
Please see the attached file
Fundamental Accounting Principles, 18th Edition
Wild, Larson, Chiappetta, McGraw-Hill Irwin
Problem 10-1B: Plant asset costs; depreciation methods.
Nagy Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January1, 2008, at a total cash price of $1,800,000 for a building, land, land improvements, and five trucks. The estimated market value of the assets is building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600. The company's fiscal year ends on December 31. ...
Purchase this Solution
Free BrainMass Quizzes
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Basics of corporate finance
These questions will test you on your knowledge of finance.
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.