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- Une depreciation expense on this bulldozer for 2017, 2018, and 2019. Maria Muchon has prepared the following list of statements about depreciation. LED 1. 2. 3. Understanding Depreciation Concepts Depreciation is a process of asset valuation, not cost allocation Three factors affect the computation of depreciation: cost, useful life, and residual value. 4. Depreciation applies to three classes of plant assets: land, buildings, and equipment 5. Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time. 6. Depreciation provides for the proper matching of expenses with revenues. 7. Recognizing depreciation on an asset results in an accumulation of cash for replacement of the The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence. 9. Depreciation expense and accumulated depreciation are reported on the income statement, 10. The balance in accumulated depreciation represents the total cost that has been charged to expense. Identify each statement as true or false. If false, indicate how to correct the statement. asset. 8. total to $23.520. E 10-4 2 of the property by WALL Cost of property. Plant, and Equipment Bandol Co. purchases a machine for $23,000, terms 2/10, 160, FOB shipping point. The seller prepaid the $520 freight charges, adding the amount to the invoice and bringing machine requires special steel mounting and power connections costing $1,592. Another 5750 is per to assemble the machine and get it into operation. In moving the machine to its steel mounting, in damages occurred. Materials costing $60 are used in adjusting the machine to produce a satisfactory product. The adjustments are normal for this machine and are not the result of the damages. Compute the cost recorded for this machine. Assume Bandol pays for this machine within the cash disco period. 126 000. The estimated Wed 3. -26 How much goodwill will be recorded as part of this acquisition Goodwill On January 1, 2018, Havel Company purchased Nantes Company at a price of $7,500,000. The fair market value of the net assets purchased equals $2,700,000. What is the amount of goodwill that Havel records at the purchase date? 2. Explain how Havel would determine the amount of goodwill amortization on December 31, 2018. 3 Havel Company believes that its employees provide superior customer service, and through their efforts, Havel Company believes it has created $2,750,000 of goodwill. How would Havel Company record this goodwill? 1