Exercise 8.1

Asset	Appraised Value	Salvage Value	Useful life	Depreciation Method	Cost
Land	$ 160,000	N/A	N/A	Not depreciated
Office Equipment	$ 70,000	$ 5,000	6 years	Straight-line
Building	$ 320,000	$100,000	25 years	Straight-line
Machinery Equipment	$ 240,000	$ 20,000	140,000 cell phones	Units-of-production
Computer Equipment	$ 10,000	$ 500	3 years	Straight-line
Total	$ 800,000				$ 750,000

1. On July 1, 2013, Tulsa pays $750,000 cash to acquire a fully equipped cell phone factory (see above). Allocate the purchase cost among the separate assets. Journalize the entry to record the purchase of the factory.

2. Fill in the chart below. Round to whole numbers

Asset	Depreciation Expense - 2013 (6 months)	Depreciation Expense - 2014	Accumulated Depreciation - as of 12/31/2014	Book Value as of 12/31/2014
Office Equipment
Building
Machinery Equipment
Computer Equipment

1. (Note: 9,500 cell phones were manufactured from July 1 Dec 31, 2013)
2. (Note: 17,800 cell phones were made in 2014)
3. When calculating cost/unit for machinery round to two decimal places)

USING FIFO AND LIFO