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These expenditures were incurred by Crane Company in purchasing land: cash price $58,430, assumed accrued taxes $5.410 attorn

Question B

Sandhill Chemicals Company acquires a delivery truck at a cost of $30,800 on January 1, 2022. The truck is expected to have a

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  • Requirement A
    >All the costs incurred in relation to the acquisition and installation of the fixed assets WILL HAVE TO BE INCLUDED in cost of THAT ASSET.
    Hence,
    Cost of the land = $ 58430 + $ 5410 + 4 2480 + $ 3320 + $ 4440
    = $ 74,080
  • Requirement B
    >Under Straight line method of depreciation, the depreciation expense EACH period, stays the same.
    >Straight line Depreciation = (Cost – Salvage) / Useful life
    = ($30800 – 3700) / 4 years
    = 27100 / 4
    = $ 6,775


First Year = $ 6775
Second Year = $ 6775

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