A-2 Required information[The following information applies to the questions displayed below.]Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. Theestimated market values of the purchased assets are building, $451,200; land, $253,800; land improvements, $37,600;and four vehicles, $197,400.Required:1-a. Allocate the lump-sum purchase price to the separate assets purchased.1-b. Prepare the Journal entry to record the purchase.2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000salvage value.3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balancedepreciation.Complete this question by entering your answers in the tabs below.Required 1B Required 2Allocate the lump-sum purchase price to the separate assets purchased.Allocation of totalcostTotal cost ofAcquisitionRequired 1ABuildingLandLand improvementsVehiclesTotalEstimatedMarket Value$$451,200253,80037,600197,400940,000Required 3Percent of Total48 %27 % × $ 830,000% x $ 830,0002x $ 830,00075 %x< Required 1A$830,000ApportionedCostS 398,400S 398,400Required 1B >

The depreciation expense is charged on the fixed assets as reduction in the value of the fixed…

Required information [The following information applies to the questions displayed below] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building. $451,200; land, $253,800;land Improvements, $37,600; and four vehicles, $197,400. Required: -a. Allocate the lump-sum purchase price to the separate assets purchased. -b. Prepare the journal entry to record the purchase. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 alvage value. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance lepreciation.

Required information [The following information applies to the questions displayed below] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building. $451,200; land, $253,800;land Improvements, $37,600; and four vehicles, $197,400. Required: -a. Allocate the lump-sum purchase price to the separate assets purchased. -b. Prepare the journal entry to record the purchase. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 alvage value. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance lepreciation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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