Bluebird company acquired White, Feather corporation and paid a lump$-$sum price for the plant, property and equipment the amount paid was $$654,500.$ The accountant was given the task to allocate the cost to each category using market value. The information is provided in the table below

Assets

Market Value

Plant

$$240,000$

Property

$$250,000$

Equipment

$$56,000$

Question $1$

Allocate the cost to each long term asset using market value

Section B

Useful life of plant

$5$ years

Useful life of equipment

$7$ years

Salvage value of plant

$$120,000$

Salvage value of equipment

$$20,000$

Purchase date

February $28,2021$

Use the nearest whole month convention for plant

Use half year convention for equipment

Year

Units

$2021$

$4000$

$2022$

$7000$

$2023$

$8500$

$2024$

$7400$

$2025$

$8100$

Total units estimated to be produced $=32000$ units