1. The IRS bought some used computer equipment. Installation, $8,000, Pre-use repair costs, $9,000, purchasing manager with salary of $54,000 spent one month evaluating equipment and completing transaction. The bill was $400,000. The seller paid 4% commission to the seller and offered the buyer a 2% discount if paid in 60 days. The freight cost was 4 thousand dollars. Repairs in the first year of use were $10,000. The IRS borrowed 10% at $300,000 to pay for the equipment. What is the equipment cost?

2. XYZ bought a building and land for $720,000 from a failed local gas station. The tax inspector gave a valuation of $200,000 to the land and $400,000 to the building as of January 1 of the current year. Register the entry for the purchase of the property.

3. CDE purchased the equipment for $40,000. It has a lifespan of five years and a residual value of $5,000. Calculate depreciation using linear and DDB. What makes DDB a desirable depreciation method?

Answer rating: 100% (QA)

1 To calculate the equipment cost we need to consider the purchase price and any additional costs associated with acquiring the equipment Equipment co... View the full answer