Managerial Accounting Question Paper
| Appraised Value | Percent of Total | Apportioned Cost | Building | $514,250 | 55% ($514,250/$935,000) | $495,000 ($900,000 x 55%) | Land | 271,150 | 29% ($271,150/$935,000) | 261,000 ($900,000 x 29%) | Land Improvements | 65,450 | 7% ($65,450/$935,000) | 63,000 ($900,000 x 7%) | Four Vehicles | 84,150 | 9% ($84,150/$935,000) | 81,000 ($900,000 x 9%) | Totals | $935,000 | 100% | $900,000 |
1. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase.
Dr – Building $495,000 Cr – Cash 495,000
Dr - Land 261,000 Cr – Cash 261,000
Dr - Land Improvements 63,000 Cr – Cash 63,000
Dr – Four Vehicles 81,000 …show more content…
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.
495,500 – 30,00015 = 31,000
3. Compute the depreciation expense for year 2009 on the land improvements assuming a five-year life and double-declining-balance depreciation. Step 1 Straight-line rate = 100% / 5 years = 20%
Step
1. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase.
Dr – Building $495,000 Cr – Cash 495,000
Dr - Land 261,000 Cr – Cash 261,000
Dr - Land Improvements 63,000 Cr – Cash 63,000
Dr – Four Vehicles 81,000 …show more content…
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.
495,500 – 30,00015 = 31,000
3. Compute the depreciation expense for year 2009 on the land improvements assuming a five-year life and double-declining-balance depreciation. Step 1 Straight-line rate = 100% / 5 years = 20%
Step