Problem 8-1B Racerback Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January 1, 2011, 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 fiscal year ends on December 31. *1) Prepare a table to allocate the lump-sum purchase price tot he seperate assets purchased (round percents to the nearest 1%). Prepare the journal entry to record the purchase. 2) Compute the depreciation expense for year 2011 on the building using the straight-line method, assuming a 12-year life and a $100,500 salvage value. 3) Compute the depreciation expense for year 2011 on the land improvements assuming a 10-year life and double-declining-balance depreciation. Problem 8-5B On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life and an estimated $28,000 salvage value. Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows: year 1, 245,600; year 2, 230,400; year 3, 227,000; year 4, 232,600; and year 5, 211,200. The total number of units produced by the end of year 5 exceeds the original estimate-this difference was not predicted. (The machine must not be depreciated below its estimated slavage value.) * Prepare a table witht eh following column headings and compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. Year Straight-Line Units-Of-Production Double-Declining-Balance