1. Allocation of Package Purchase Price

Tamock Company purchased a plant from one of its suppliers. The $965,000 purchase price included the land, a building, and factory machinery. Tamock also paid $5,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased:

Property	Assessed Value
Land	$126,000
Building	486,000
Machinery	288,000
Total	$900,000

Using the assessed value as a guide, allocate the total purchase price of the plant to the land, building, and machinery accounts in Tamock Companys records.

Asset	Allocation of Purchase Price
Land
Building
Machinery
Total

2. Depreciation Methods

A delivery truck costing $22,000 is expected to have a $1,500 salvage value at the end of its useful life of four years or 125,000 miles. Assume that the truck was purchased on January 2. Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units-of-production. (Assume that the truck was driven 28,000 miles in the second year.) Round all answers to the nearest dollar.

a. Straight-line
b. Double-declining balance
c. Units-of-production

3. Revision of Depreciation

On January 2, 2012, Mosler, Inc., purchased equipment for $156,000. The equipment was expected to have a $15,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2016, Mosler decided that the useful life of the equipment should be extended by two years and the salvage value decreased to $13,000.

a. Prepare a journal entry to record depreciation expense on the equipment for 2016. Round your answer to the nearest dollar.

General Journal
		Debit	Credit
Dec. 31	Depreciation Expense - EquipmentAccumulated Depreciation - EquipmentEquipment
	Depreciation Expense - EquipmentAccumulated Depreciation - EquipmentEquipment
	To record depreciation expense.

b. What is the book value of the equipment at the end of 2016 (after recording the depreciation expense for 2016)?

Book Value at year ended December 31, 2016: $

4. Return on Assets Ratio and Asset Turnover Ratio

Campo Systems reported the following financial data (in millions) in its annual report:

	2015	2016
Net Income	$8,052	$6,134
Net Sales	39,540	36,117
Total Assets	58,734	68,128

If the companys total assets are $55,676 in 2014, calculate the companys (a) return on assets (round to one decimal point) and (b) asset turnover for 2015 and 2016 (round to two decimal points).

		2015	2016
a.	Return on Assets Ratio
b.	Asset Turnover Ratio