Monarch Company negotiated a lump-sum purchase of several assets from a contractor who was retiring. The purchase was completed on January 1 of the current year, at a total cash price of $1,500,000 for a building, land, land improvements, and five trucks. The estimated market value of the assets are building, $890,000; land, $427,200, land improvements, $249,200; and five trucks, $213,600. The companys fiscal year ends on December 31.

Requirements:

The table to allocate the lump-sum purchase price to the separate assets purchased (display a rounded amount to the nearest dollar). Prepare a journal entry to record this purchase.

Complete the table to show the annual depreciation using the straight-line method, the declining balance method, and the sum-of-the-years digits method for the building over the life of this asset. Assume a 12-year life and a $120,000 salvage value. Create the table for the entire life of the asset but only show journal entries using each method for the first two years on the general journal supplied on your working papers.

For the Straight-Line method, manually create a formula in the 2^nd column; repeat your calculations using the SL formula tool within Excel. Your numbers should be identical.

For the DDB method, first manually create formulas in the rate column and the first depreciation expense column. Next repeat the depreciation expense in the next column using the DDB formula in the Excel tools. Your numbers should be identical.

Using the SYD method you will have difficulties manually trying to program the fraction. Instead, use the SYD formula in the Excel tools to solve.

Complete the table to show the annual depreciation on the five trucks using the straight-line, the declining balance method, and the sum-of-the-years digits methods. Assume a 5-year life and a salvage value of $3,000 each, or $15,000. The company uses the composite method for simplicity for all trucks. This means you will calculate the total just one time for all five trucks together. You will again create a math formula manually to solve for depreciation first; in the final column you will use the SLN, DDB and SYD formula tools within Excel.

Complete the table to show the annual depreciation on the land improvements using the straight-line method only. Assume a 10-year life and no salvage value. Assets of this type typically are handled using only this method. Manually create a math formula first, then calculate again using the SLN formula tool.

In order to earn maximum points, be sure to include and complete the CIS Excel learning objectives listed above.

Analysis: Complete the final comparison chart. Defend or refute this statement: Accelerated depreciation results in payment of more taxes over the assets life. As with prior projects, you may need to review your old ACC 121 textbooks and notes when the first introduction to these concepts was done.