Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $425,500; land, $240,500; land improvements, $74,000; and four vehicles, $185,000.

Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.

Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $425,500; land, $240,500; land improvements, $74,000; and four vehicles, $185,000.

4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the assets life?

Is tax payment less under accelerated depreciation?