Allocation of Package Purchase Price and Depreciation Methods

To expand its business, Small Company paid $1,054,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Small hired a consultant for $6,000 to appraise the assets. The appraised values were as follows:

Property	Assessed Value
Land	$180,000
Building	660,000
Trucks	216,000
Equipment	144,000
Total	$1,200,000

Small issued two checks totaling $1,060,000 to acquire the assets and pay the consultant on July 1. Small depreciated the assets using the straight-line method on the building and on the equipment, and the double-declining balance method on the trucks. Estimated useful lives and salvage values were as follows:

	Useful Life	Salvage Value
Building	20 years	$42,000
Trucks	4 years	15,000
Equipment	7 years	10,000

a. Calculate the amounts allocated to the various types of plant assets acquired on July 1.