Question

Runnels’ Doggie Daycare purchased a building and land for a total cash price of $150,000. An independent appraiser provides the following market values: building, $59,500; land, $110,500.
1. How much of the purchase price should the company allocate to each of the assets?
2. If the building has a useful life of eight years and an estimated salvage value of $10,500, how much depreciation expense should Runnels record each year using the straight-line method?
3. Using the double-declining balance method, what would the book value of the building be at the end of four years?



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  • CreatedSeptember 01, 2014
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