Account for basket purchase. (LO 1, 2)

Coca-Cola purchases a building and land for \(\$ 180,000\). An independent appraiser provides the following market values: building- \(\$ 150,000\); land- \(\$ 50,000\).

a. How much of the purchase price should Coca-Cola allocate to each of the assets?

b. If the building has a useful life of 10 years and an estimated salvage value of \(\$ 35,000\), how much depreciation expense should Coca-Cola record each year using the straight-line method?

c. Using the double-declining balance method, what would the book value of the building be at the end of 3 years?