Question

Part (4) 1) XYZ Corporation bought three lots in a subdivision for a lump sum price. An independent appraiser valued the lots as follows: Lot (1) 45,000 Lot (2) 292,500 and Lot (3) 112,500 XYZ Corporation paid $ 435,000 in cash. What is the amount allocated to Lot (272 A) S 300,000 B) S 255.000 C) S 282,750 D) $285,000 2) On January 1, 2018 Blue Corporation purchase a new truck with cost of 12,000 and savage value of $ 2,000 and estimated life of 5 years. Under the double Decline Balance, the depreciation expense for the second year? A) 2,400 B) 4,800 C) 1,200 D) 2,880 Part (4) 3) Basis form question #2, the total accumulated depreciation for the second year would be A) 2,500 B) 4,000 C) 7,680 D) 8,000 4) Basis from question #2 the total accumulated depreciation for the second year under straight line method would be? A) 2,500 B) 3,000 C) 2,000 D) 4,000

Answer 1

1]	Amount allocated to Lot 2 = 435000*292500/(45000+292500+112500) =	$    2,82,750
	Answer: Option: [C] $282,750.
2)	Rate of depreciation = (100%)*2/5 =	40.00%
	Depreciation for 1st year = 12000*40% =	$          4,800
	Depreciation for 2nd year = (12000-4800)*40% =	$          2,880
	Answer: Option: [D] $2,880.
3]	Total accumulated depreciation for the 2nd year = 4800+2880 =	$          7,680
	Answer: Option [C] $7,680
4]	Total accumulated depreciation for the 2nd year under SLM = (12000-2000)*2/5 =	$          4,000
	Answer: Option [D] $4,000