Required information Problem 8-1A (Algo) Plant asset costs; depreciation methods LO C1, P1 [The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $800,000. The estimated market values of the purchased assets are building, $465,300; land, $277,200; land improvements, $49,500; and four vehicles, $198,000. Problem 8-1A (Algo) Part 1-3 Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Depreciation expense on land improvements < Prev 1 2 of 5 Next >
Required information Problem 8-1A (Algo) Plant asset costs; depreciation methods LO C1, P1 [The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $800,000. The estimated market values of the purchased assets are building, $465,300; land, $277,200; land improvements, $49,500; and four vehicles, $198,000. Problem 8-1A (Algo) Part 1-3 Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Depreciation expense on land improvements < Prev 1 2 of 5 Next >
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 75BPSB
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
![Required information
Problem 8-1A (Algo) Plant asset costs; depreciation methods LO C1, P1
[The following information applies to the questions displayed below.]
Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $800,000. The
estimated market values of the purchased assets are building, $465,300; land, $277,200; land improvements, $49,500;
and four vehicles, $198,000.
Problem 8-1A (Algo) Part 1-3
Required:
1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000
salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B
Required 2 Required 3
Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Depreciation expense on land improvements
< Required 2
< Prev
Porquined 3 >
12
of 5
Next >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd31872b8-79e7-4ecf-b3c3-0b38888ecd56%2F816c097f-5141-4d34-8e35-b021f1432345%2Fzuc6g8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 8-1A (Algo) Plant asset costs; depreciation methods LO C1, P1
[The following information applies to the questions displayed below.]
Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $800,000. The
estimated market values of the purchased assets are building, $465,300; land, $277,200; land improvements, $49,500;
and four vehicles, $198,000.
Problem 8-1A (Algo) Part 1-3
Required:
1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000
salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Complete this question by entering your answers in the tabs below.
Required 1A Required 1B
Required 2 Required 3
Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Depreciation expense on land improvements
< Required 2
< Prev
Porquined 3 >
12
of 5
Next >
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