{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ProblemSet6

# ProblemSet6 - Chapter 7 Plant Assets and Intangibles(5-10...

This preview shows pages 1–3. Sign up to view the full content.

Chapter 7 Plant Assets and Intangibles (5-10 min.) E 7-15 Land: \$150,000 + \$150,000 + \$2,000 + \$2,500 + \$6,000 = \$310,500 Land improvements: \$65,000 + \$10,400 + \$6,000 = \$81,400 Building: \$50,000 + \$1,000,000 = \$1,050,000 (15-20 min.) E 7-19 Year Straight-Line Units-of- Production Double-Declining- Balance 20X1 \$ 3,000 \$ 4,080 \$ 7,500 20X2 3,000 3,360 3,750 20X3 3,000 2,160 750 20X4 3,000 2,400 -0- \$12,000 \$12,000 \$12,000 _____ Computations: Straight-line: (\$15,000 \$3,000) ÷ 4 = \$3,000 per year. Units-of-production: (\$15,000 \$3,000) ÷ 100,000 miles = \$.12 per mile; 20X1 34,000 × \$.12 = \$4,080 20X2 28,000 × .12 = 3,360

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
20X3 18,000 × .12 = 2,160 20X4 20,000 × .12 = 2,400 Double-declining-balance — Twice the straight-line rate: 1/4 × 2 = 2/4 = 50% 20X1 \$15,000 × .50 = \$7,500 20X2 (\$15,000 \$7,500) × .50 = \$3,750 20X3 \$7,500 \$3,750 = \$3,750 residual value of \$3,000 = \$750 The units-of production method tracks the wear and tear on the van most closely. For income tax purposes, the double-declining-balance method is best because it provides the most depreciation and, thus, the largest tax deductions in the early life of the asset. The company can invest the tax savings to earn a return on the investment. (5-10 min.) E 7-27 Req. 1 Cost of goodwill purchased: Millions Purchase price paid for MySpace.com…………….. \$18
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern