On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Residual Asset Land Building Equipment Vehicles Total Cost $ 125,000 550,000 190,000 185,000 $1,050,000 Value N/A none 12% of cost $13,000 Estimated Useful Life (in years) N/A 20 8 10 On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $105,000 was sold for $85,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service.

On March 31, 2021, the Herzog Company purchased a factory complete with vehicles and equipment. The allocation of the total purchase price of $1,050,000 to the various types of assets along with estimated useful lives and residual values are as follows: Estimated Residual Asset Land Building Equipment Vehicles Total Cost $ 125,000 550,000 190,000 185,000 $1,050,000 Value N/A none 12% of cost $13,000 Estimated Useful Life (in years) N/A 20 8 10 On June 29, 2022, equipment included in the March 31, 2021, purchase that cost $105,000 was sold for $85,000. Herzog uses the straight-line depreciation method for building and equipment and the double-declining-balance method for vehicles. Partial-year depreciation is calculated based on the number of months an asset is in service.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 13P

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