Allocation of Package Purchase Price and Depreciation Methods In and expansion move, Beam Company paid $2,280,000 for most of the property, plant, and equipment of a small manufacturing firm that was going out of business. Before agreeing to the price, Beam hired a consultant for $20,000 to appraise the assets. The appraised values were as follows:

Show transcribed image text Allocation of Package Purchase Price and Depreciation Methods In and expansion move, Beam Company paid $2,280,000 for most of the property, plant, and equipment of a small manufacturing firm that was going out of business. Before agreeing to the price, Beam hired a consultant for $20,000 to appraise the assets. The appraised values were as follows: $400,000 950,000 Equipment 1,000,000 150,000 Total $2,500,000 Land Building Trucks Beam issued two checks totaling $2,300,000 to acquire the assets and pay the consultant on April 1. Beam depreciated the assets using the straight-line method for the building and equipment, and the double-declining balance method for the trucks. Estimated useful lives and salvage values were as follows: Salvage Useful Life Value Building Equipment Trucks 15 years $86,000 9 years 70,000 5 years 13,000