For $22.200.000, Jupiter, Inc. purchased another com assets as follows: land, $2
ID: 2510448 • Letter: F
Question
For $22.200.000, Jupiter, Inc. purchased another com assets as follows: land, $2.440,000: building, $15.860,000: and equipment, $6.100.000 indicate the values of these pany's land, building, and equipment. Independent appraisals i How much should be recorded as the acquistion cost of each asset? Select one: O A. Land. $2.330.000: Building, $15.145.000: Equipment $5.825.000 B. Land. $2.440,000: Building, $15.860.000. Equipment, $6,100,000 O C. Land, $2.500.000: Building, $14400.000. Equipment. $6.600.000 D. Land. $2.220,000: Building, $14.430.000: Equipment. $5.550.000Explanation / Answer
1) The acquisition cost of each asset is calculated as follows:-
Total Value of Land, Building and Equipment = $2,440,000+$15,860,000+$6,100,000
= $24,400,000
Acquisition cost of Land = $22,200,000*($2,440,000/24,400,000)
= $2,220,000
Acquisition cost of Building = $22,200,000*($15,860,000/24,400,000)
= $14,430,000
Acquisition cost of Equipment = $22,200,000*($6,100,000/24,400,000)
= $5,550,000
Therefore the correct answer is D.) Land, $2,220,000, Building, $14,430,000, Equipment, $5,550,000.
2) 2016 Depreciation Expense = (Cost - Salvage Value)/Useful Life
= ($186,750-$6,750)/9 yrs = $20,000 per year
Therefore the correct answer is C) $20,000.
3) Depreciation per mile = (Cost - Salvage Value)/Life in miles
= ($29,400 - $1,400)/200,000 miles = $0.14 per mile
2016 Depreciation Expense = Miles driven in 2016*Depreciation per mile
= 20,000 miles*$0.14 = $2,800
Therefore the correct answer is A) $2,800.