Allocation of Package Purchase Price and Depreciation Methods To expand its business, Renee Company paid $760,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Renee hired a consultant for $10,000 to appraise the assets. The appraised values were as follows: Property Assessed Value Land $120,000 Building 440,000 Trucks 144,000 Equipment 96,000 Total $800,000 Renee issued two checks totaling $770,000 to acquire the assets and pay the consultant on July 1. Renee depreciated the assets using the straight-line method on the building and on the equipment, and the double-declining balance method on the trucks. Estimated useful lives and salvage values were as follows: Useful Life Salvage Value Building 20 years $42,000 Trucks 4 years 15,000 Equipment 8 years 10,000
Allocation of Package Purchase Price and Depreciation Methods To expand its business, Renee Company paid $760,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Renee hired a consultant for $10,000 to appraise the assets. The appraised values were as follows: Property Assessed Value Land $120,000 Building 440,000 Trucks 144,000 Equipment 96,000 Total $800,000 Renee issued two checks totaling $770,000 to acquire the assets and pay the consultant on July 1. Renee
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
