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    Manju123's Avatar
    Manju123 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 5, 2011, 01:42 PM
    Balter Inc. acquired Jersey Company on January 1, 20X5.
    Balter Inc. acquired Jersey Company on January 1, 20X5. When the purchase occurred Jersey Company had the following information related to fixed assets:
    Land $ 80,000
    Building 200,000
    Accumulated Depreciation (100,000)
    Equipment 100,000
    Accumulated Depreciation (50,000)


    The building has a 10-year remaining useful life and the equipment has a 5-year remaining useful life. The fair value of the assets on that date were:
    Land $100,000
    Building 130,000
    Equipment 75,000


    What is the 20X5 depreciation expense Balter will record related to purchasing Jersey Company?

    1. $30,000
    2. $15,000
    3. $8,000
    4. $28,000
    rehmanvohra's Avatar
    rehmanvohra Posts: 739, Reputation: 27
    Senior Member
    		  
    #2

    Feb 6, 2011, 07:54 AM
    Depreciation will be calculated on fair values of the assets
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