A company is considering purchasing a parcel of land that was originally acquired by the seller for $85,000. While the land is currently offered for sale at $150,000, it is considered by the purchaser as easily being worth $140,000, and is finally purchased for $137,000, the land should be recorded in the purchaser's books at

A company is considering purchasing a parcel of land that was originally acquired by the seller for $85,000. While the land is currently offered for sale at $150,000, it is considered by the purchaser as easily being worth $140,000, and is finally purchased for $137,000, the land should be recorded in the purchaser's books at

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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If a company is considering the purchase of a parcel of land that was originally acquired by the seller for $88,000, is currently offered for sale at $156,000, is considered by the purchaser as easily being worth $146,000, and is finally purchased for $143,000, the land should be recorded in the purchaser's books at:
1. Suppose you have purchased land, a building, and some equipment. At the time of the acquisition, the land has a current fair value of $75,000, the building’s fair value is $60,000, and the equipment’s fair value is $15,000. Journalize the lump-sum purchase of the three assets for a total cost of $140,000. Assume you sign a note payable for this amount. Show all steps please.
A building with an appraisal value of $129,802.00 is made available at an offer price of $150,878.00. The purchaser acquires the property for $33,175.00 in cash, a 90-day note payable for $25,972.00, and a mortgage amounting to $57,161.00. What is the cost basis recorded in the buyer's accounting records to recognize this purchase? Select the correct answer. $129,802.00 $150,878.00 $117,703.00 $116,308.00
The company has recieved a donation of land from a rich local philanhropist. the land originally cost the philanhropist $48,000. on the date of the donation, it had a market value of $111,000. Make the journal entry necessary on the book of the company to record the receipt of the land
Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of$124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of$280,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The businesssigns a note payable for the purchase price.
Calculate and allocate basis for the following problems. 1. A property is acquired for a purchase price of $230,000 cash plus acquisition costs of $20,000. The tax assessment for this property is as follows: Assessed Value Land Improvements Total assessments $40,000 160,000 $200,000 a. What is the acquisition basis for this property? b. What is the allocation for land? c. What is the allocation for improvements?
if a company is considering the purchase of a parcel of land that was acquired by the seller for $89,000 is offered for sale at 158,000 is assessed for tax purposes at 99,000 is considered by the purchaser as easily being worth 148,000 and is purchased for 145,000 the land should be recored in the purchaser books at (A. 99,000, B. 145,000, C. 146,500, D. 148,000, E. 158,000)
Tanaka Company has land that cost $15,000,000. Its fair value on December 31, 2020, is $20,000,000. Tanaka chooses the revaluation model to report its land. Explain how the land and its related valuation should be reported.
Land was acquired in 2021 for a future building site at a cost of $41,600. The assessed valuation for tax purposes is $27,000, a qualified appraiser placed its value at $49,500, and a recent firm offer for the land was for a cash payment of $44,400. The land should be reported in the financial statements at: $27,000. $49,500. $41,600. $44,400.
Assume the total sales price and cost of a property are $2,000,000 and $1,100,000, respectively, so that the total profi t to be recognized is $900,000. Th e amount of cash received by the seller as a down payment is $300,000, with the remainder of the sales price to be received over a 10-year period. It has been determined that there is signifi cant doubt about the ability and commitment of the buyer to complete all payments. How much profi t will be recognized attributable to the down payment if: 1 . Th e installment method is used? 2 . Th e cost recovery method is used?
A building is offered for sale at $500,000 but is currently assessed at $400,000. The purchaser of the building believes the building is worth $475,000, but ultimately purchases the building for $450,000. The purchaser records the building at: a. $50,000. c. $450,000. e. $500,000. b. $400,000. d. $475,000.
On January 1, 2019, Alberta Company purchased land and a building for $1,120,000. At the time of the purchase, it was estimated that the building had a market value of $700,000. On January 5, Alberta installed a fence around the property at a cost of $7,000. Given this information, the journal entry to record the purchase of the land and building would include a) Debit to Land for $420,000 b) Debit to Land for $413,000 c) Debit to Land for $700,000 d) Debit to Land for $427,000