Need help with Appraised Value and Depreceiation Value! Accounting Timberly Cons
ID: 2478323 • Letter: N
Question
Need help with Appraised Value and Depreceiation Value! Accounting
Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2015, at a total cash price of $810,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $458,400; land, $267,400; land improvements, $66,850; and four vehicles, $162,350. The company's fiscal year ends on December 31 Required 1.1 Prepare a table to allocate the lump-sum purchase price to the separate assets purchased Percent of Total Allocation of total cost Appraised Value Total cost of Acquisition Apportioned Cost Appraisedx Total co Value Building Land Land improvements Vehicles Total 0%Explanation / Answer
Statement showing computations Allocation of Total Cost Appraised Value Percent of Total Appraised Value Total Cost of Acquisition Apportioned Cost Building 458,400.00 48.00% 810,000.00 388,800.00 Land 267,400.00 28.00% 810,000.00 226,800.00 Land Improvements 66,850.00 7.00% 810,000.00 56,700.00 Vehicles 162,350.00 17.00% 810,000.00 137,700.00 955,000.00 100.00% 810,000.00 Cost of Land Improvements 56,700.00 Life in years 5 depreciation rate = 1/5 *2 40% Depreciation for 2015= 56,700*40% 22,680.00 Cost of Building 388,800.00 Life in years 15 Salvage Value 32,000.00 Depreciation = (388,800-32,000)/15 23,786.67