April 14-2011 - PROBLEM 11-10 (1) $80,000 Allocated in...

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PROBLEM 11-10 (1) $80,000 Allocated in proportion to appraised values (1/10 X $800,000). (2) $720,000 Allocated in proportion to appraised values (9/10 X $800,000). (3) Fifty years Cost less salvage ($720,000 – $40,000) divided by annual depreciation ($13,600). (4) $13,600 Same as prior year since it is straight-line depreciation. (5) $91,000 [Number of shares (2,500) times fair value ($30)] plus demolition cost of existing building ($16,000). (6) None No depreciation before use. (7) $40,000 Fair value. (8) $6,000 Cost ($40,000) times percentage (1/10 X 150%). (9) $5,100 Cost ($40,000) less prior year’s depreciation ($6,000) equals $34,000. Multiply $34,000 times 15%. (10) $168,000 Total cost ($182,900) less repairs and maintenance ($14,900). (11) $36,000 Cost less salvage ($168,000 – $6,000) times 8/36. (12) $10,500 Cost less salvage ($168,000 – $6,000) times 7/36 times one-third of a year.
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PROBLEM 11-10 (Continued) (13) $52,000 Annual payment ($6,000) times present value of annuity
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This note was uploaded on 04/29/2011 for the course ACCT 3001 taught by Professor Erickson during the Spring '10 term at University of Minnesota Duluth.

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April 14-2011 - PROBLEM 11-10 (1) $80,000 Allocated in...

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