Bob Co. purchased land and buildings for $1,500,000 in a basket purchase. The fair value of the land and buildings respectively are determined to be $1,200,000 and $600,000. The assets acquired will be recorded on Bob's balance sheet as

Land $1,200,000; Buildings $600,000.

Land $1,200,000; Buildings $300,000.

Land $1,000,000; Buildings $500,000.

Land $900,000; Buildings $600,000.

On January 1, a company purchases a capital asset with a four-year useful life and no residual value. The asset will be used each year to produce 50,000 units of inventory for sale. Which of the following depreciation methods will result in the lowest net income in the first year?

The straight-line method.

The 30% declining-balance method.

The units-of-activity method.

One cannot tell without knowing the original cost of the asset.