# Session%2011 - Solutions For Session 11 Assignments:...

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Solutions For Session 11 Assignments: Multiple Choice(Page 418): 1 . a 2. c 3. c 4. b 5. b 6. b 7. c 8. c 9. a 10. b E8-1A a. How much of the purchase price should Coca-Cola allocate to each of the assets? Relative Cost to Cost to FMV FMV allocate record Building \$150,000 0.75 \$180,000 \$135,000 Land 50,000 0.25 \$180,000 \$45,000 \$200,000 b. If the building has a useful life of 10 years and an estimated salvage value of \$35,000, how much depreciation expense should Coca-Cola record each year using the straight-line method? Annual Depreciable Estimated depreciation Cost less Salvage cost useful life expense \$135,000 \$35,000 \$100,000 10 \$10,000

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c. Using the double-declining balance method, what would the book value of the building be at the end of three years? Straight line rate: 1/10 or 10% Doubled: 20% Annual Accumulated Year Rate Book value depreciation depreciation 1 20% \$135,000 \$27,000 \$27,000 2 20% \$108,000 \$21,600 \$48,600 3 20% \$86,400 \$17,280 \$65,880 Book value at the end of year 3:
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## This note was uploaded on 04/12/2009 for the course AIM 2301 taught by Professor Muslu during the Spring '08 term at University of Texas at Dallas, Richardson.

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Session%2011 - Solutions For Session 11 Assignments:...

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