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Exercise 6-5 Allocating costs on the basis of relative market values LO 6-1 Carver Inc. purchased a building and the land on which the building is situated for a total cost of $908,400 cash. The land wa appraised at $167,146 and the building at $877,514. Required b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. c. Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required B Required C Required D Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Land Building Total Allocated Cost $ 145,343 X 763,050 X $ 908,393 Required information Exercise 6-9 Computing and recording straight-line versus double-declining-balance depreciation LO 6-2 6-3 (The following information applies to the questions displayed below.] At the beginning of 2018, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Exercise 6-9 Part a Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. Straight-Line depreciation $ 28,000 (2) Double-declining-balance depreciation. (Leave no cells blank - be certain to enter "O" wherever required.) Double-Declining Balance 55,930 X $ 37,529 X Year 1 Year 2 Year 3 Year 4 Year 5 $ 25,181 x $ 16,897 X $ 4,463 X Exercise 6-9 Computing and recording straight-line versus double-declining-balance depreciation LO 6-2 6-3 [The following information applies to the questions displayed below. At the beginning of 2018, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Exercise 6-9 Part b b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign.) Balance Sheet COPELAND DRUGSTORE Horizontal Statements Model Income Statement Stockholders' Equity Revenue Expenses Retained Earnings Assets Net Income Statement of Cash Flows + Book Cash Value of Computer System (170,000) + 170,000 Straight-Line Depreciation (170,000) IA x 28,000 (28,000) (28,000) OA Double-Declining-Balance Depreciation I= 55,930 X = *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. (55,930) X (28,000) Arizona Corp. acquired the business Data Systems for $370,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $440,000, liabilities of $29,000, and stockholders' equity of $411,000. An appraiser assessed the fair market value of the tangible assets at $360,000 at the date of acquisition. Required a. Compute the amount of goodwill acquired. b. Record the purchase in a financial statements model like the preceding one. Arizona Corp.'s financial condition just prior to the acquisition is shown in the following statements model. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of goodwill acquired. (Amounts to be deducted should be indicated with minus sign.) Acquisition Price Cash paid $ 370,000 Liabilities (29,000) assumed Total 341,000 FMV of assets 360,000 Goodwill $ 39,000 Exercise 6-5 Allocating costs on the basis of relative market values LO 6-1 Carver Inc. purchased a building and the land on which the building is situated for a total cost of $908,400 cash. The land wa appraised at $167,146 and the building at $877,514. Required b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. c. Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model. Complete this question by entering your answers in the tabs below. Required B Required C Required D Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Land Building Total Allocated Cost $ 145,343 X 763,050 X $ 908,393 Required information Exercise 6-9 Computing and recording straight-line versus double-declining-balance depreciation LO 6-2 6-3 (The following information applies to the questions displayed below.] At the beginning of 2018, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Exercise 6-9 Part a Required a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. Straight-Line depreciation $ 28,000 (2) Double-declining-balance depreciation. (Leave no cells blank - be certain to enter "O" wherever required.) Double-Declining Balance 55,930 X $ 37,529 X Year 1 Year 2 Year 3 Year 4 Year 5 $ 25,181 x $ 16,897 X $ 4,463 X Exercise 6-9 Computing and recording straight-line versus double-declining-balance depreciation LO 6-2 6-3 [The following information applies to the questions displayed below. At the beginning of 2018, Copeland Drugstore purchased a new computer system for $170,000. It is expected to have a five-year life and a $30,000 salvage value. Exercise 6-9 Part b b. Record the purchase of the computer system and the depreciation expense for the first year under straight-line and double- declining-balance methods in a financial statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), a financing activity (FA) and net change in cash (NC). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign.) Balance Sheet COPELAND DRUGSTORE Horizontal Statements Model Income Statement Stockholders' Equity Revenue Expenses Retained Earnings Assets Net Income Statement of Cash Flows + Book Cash Value of Computer System (170,000) + 170,000 Straight-Line Depreciation (170,000) IA x 28,000 (28,000) (28,000) OA Double-Declining-Balance Depreciation I= 55,930 X = *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted. (55,930) X (28,000) Arizona Corp. acquired the business Data Systems for $370,000 cash and assumed all liabilities at the date of purchase. Data's books showed tangible assets of $440,000, liabilities of $29,000, and stockholders' equity of $411,000. An appraiser assessed the fair market value of the tangible assets at $360,000 at the date of acquisition. Required a. Compute the amount of goodwill acquired. b. Record the purchase in a financial statements model like the preceding one. Arizona Corp.'s financial condition just prior to the acquisition is shown in the following statements model. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of goodwill acquired. (Amounts to be deducted should be indicated with minus sign.) Acquisition Price Cash paid $ 370,000 Liabilities (29,000) assumed Total 341,000 FMV of assets 360,000 Goodwill $ 39,000