a) JK Company has just purchase a new stamping machine and is considering using Double Declining Balance depreciation at twice the straight line rate. If the asset has a ten year life, what would be the Double Declining Balance rate?

b) The Bud Co. made a basket purchase of $500,000 for an acquisition of land and a building. The purchase was paid by signing a ten year note. The company had an appraiser determined the market value of each asset as follows:

Building $350,500

Land $149,500

Using the basket purchase allocation method prepare the journal entry to record the purchase.

c) Johnny Company purchased an oil producing well for $12,000,000. The well was expected to produce

500,000 barrels of oil over its useful life. During 2020, the company extracted 60,000 barrels of oil.

The oil was sold for $50 per barrel. Based on this information, how much depletion expense would Johnny report in 2016?