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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, 2013, at a total cash price of $900,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $508,800; land, $297,600; land improvements, $28,800; and four vehicles, $124,800. The company's fiscal year ends on December 31

Compute the depreciation expense for year 2013 on the building using the straight-line method, assuming a 15-year life and a $27,000 salvage value.Compute the depreciation expense for year 2013 on the land improvements assuming a five-year life and double-declining-balance depreciation.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9969885

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