Required information[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 $810,000. Theestimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600;and four vehicles, $147,200.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-yea depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000salvage value.3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balancedepreciation.Complete this question by entering your answers in the tabs below.Required 1ARequired 1BAllocate the lump-sum purchase price to the separate assets purchased.Allocation of totalcostBuildingLandRequired 2 Required 3Land improvementsEstimatedMarket Value$ 496,800248,40027,600Percent of TotalX% X% X%Total cost ofAcquisitionApportionedCost Required information[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 $810,000. Theestimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600;and four vehicles, $147,200.4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life?Is tax payment less under accelerated depreciation?

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Description: Required information[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 $810,000. Theestimated market values of the purchased as

Straight line method of depreciation is a concept under which an asset is depreciated at a constant…

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formation ing information applies to the questions displayed below.] onstruction makes a lump-sum purchase of several assets on January 1 at a total c harket values of the purchased assets are building, $496,800; land, $248,400; lar hicles, $147,200. ump-sum purchase price to the separate assets purchased. ournal entry to record the purchase. rst-year depreciation expense on the building using the straight-line method, assu

formation ing information applies to the questions displayed below.] onstruction makes a lump-sum purchase of several assets on January 1 at a total c harket values of the purchased assets are building, $496,800; land, $248,400; lar hicles, $147,200. ump-sum purchase price to the separate assets purchased. ournal entry to record the purchase. rst-year depreciation expense on the building using the straight-line method, assu

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter2: Asset And Liability Valuation And Income Recognition

Section: Chapter Questions

Problem 5QE

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Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?
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