Connor’s Tasty Vegan Restaurant purchased an oven and a delivery vehicle from a “going out of business” sale for a combined total of $32,000. An independent appraiser provides the following market values: oven—$15,000; delivery vehicle—$35,000.
1. How much of the purchase price should Connor’s allocate to each of the assets?
2. If the oven has a useful life of four years and an estimated salvage value of $1,600, how much depreciation expense should Connor’s record each year using the straight-line method?
3. If the delivery vehicle has a useful life of eight years and an estimated salvage value of $2,000, what would the book value of the vehicle be at the end of three years using the double-declining balance method?

  • CreatedSeptember 01, 2014
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