P10-1B Property, plant and equipment costs; depreciation methods Racerback Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January 1,2015 , at a total cash price of $1,610,000 for a building, land, land improvements, and six trucks. The estimated market values of the assets are building, $784,800; land, $540,640; land improvements, $226,720; and six trucks, $191,840. The company's financial year ends on December 31 . Required 1. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased (round percents to the nearest 1% ). Prepare the journal entry to record the purchase. 2. Compute the depreciation expense for year 2015 on the building using the straight-line method, assuming a 12 -year life and a $100,500 residual value. 3. Compute the depreciation expense for year 2015 on the land improvements assuming a 10-year life and double-declining-balance depreciation. Analysis Component 4. Defend or refute this statement: Accelerated depreciation results in payment of more taxes over the asset's life