ch8 hw answers

ch8 hw answers - CHAPTER 8 HOMEWORK: Multiple Choice(Page...

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CHAPTER 8 HOMEWORK: 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: Cost $135,000
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ch8 hw answers - CHAPTER 8 HOMEWORK: Multiple Choice(Page...

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