April 14-2011

# 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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