Becker F4 Depreciable Assets and Depreciation question 16/18 CPA 05913
The question asks for the depreciable base that should be used for the second owner of the asset. The purchase price is not
provided but relevant information pertaining to the original owner is.
Original owner: Cost $135,000 - $10,000 = $125,000 (depreciable base )
After $15,000 of depreciation expense is taken a new owner acquires the property.
Cost of 135,000-15,000 = 120,000 carrying value on old owner's books
New owner acquires the asset and estimates the salvage value to be 15,000. I used the BV of 120,000
and deducted salvage estimated by new owner's of 15,000 to come up with a 105,000 depreciable base.
Becker used the original cost to the old owners. When a purchase price is not given should I assume the cost of
the asset to the new owner's is that of the original owner's?
Any help is greatly appreciated.
