Questions -
Q1. On 1/1/X1, Wolfpack Creamery sold one of its ice cream trucks for $25,000. Just prior to its sale, the "Truck" asset account had a normal account balance of $60,000 and its related "Accumulated Depreciation" account had a normal account balance of $40,000.
Compute the gain or loss on the sale by comparing the book value of the sold asset to the cash received.
Q2. On 1/1/X1, Henning Corp. purchased land and a building for a combined cost of $2,000,000. The land is estimated to have a fair market value of $294,000 and the building has a fair market value of $1,806,000.
Rounding to the nearest whole dollar, how much of the $2,000,000 purchase price should be allocated to the building?