Zeidler Company bought a building and the land on which the building is located for a total cash price of $178,000. The company paid transfer costs of $2,000. Renovation costs on the building were $23,000. An independent appraiser provided market values for the land, $110,000, and building, $330,000 before renovation. Required: 1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.) Apportioned cost Renovation cost Purchase cost Item Building Land $ 0 $ 2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Zeidler Company bought a building and the land on which the building is located for a total cash price of $178,000. The company paid transfer costs of $2,000. Renovation costs on the building were $23,000. An independent appraiser provided market values for the land, $110,000, and building, $330,000 before renovation. Required: 1. Apportion the cost of the property on the basis of the appraised values. (Input all amounts as positive values.) Apportioned cost Renovation cost Purchase cost Item Building Land $ 0 $ 2. Prepare the journal entry to record the purchase of the building and land, including all expenditures. Assume that all transactions were for cash and that all purchases occurred at the start of the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Understanding about lump-sum purchase:
VIEWStep 2: Apportion the cost of the property on the basis of the appraised values:
VIEWStep 3: Record purchase of building and land:
VIEWStep 4: Compute depreciation of the building at the end of one year, using the straight-line method:
VIEWStep 5: Carrying amount of the property at the end of year 2:
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