Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 10, Problem 1BP
Nagy Company makes a lump-sum purchase of several assets on January 1 at a total cash price of $1,800,000. The estimated market values of the purchased assets are building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600.
Required
- 1. Allocate the lump-sum purchase price to the separate assets purchased. 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 12-year life and a $120,000 salvage value. - 3. Compute the first-year depreciation expense on the land improvements assuming a 10-year life and double-declining-balance depreciation.
Analysis Component
- 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $900,000. The estimated market values of the purchased assets are building, $508,800; land, $297,600; land improvements, $28,800; and four vehicles, $124,800. Required 1. Allocate the lump-sum purchase price to the separate assets purchased. 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 $27,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Analysis Component 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?
Nagy Company makes a lump-sum purchase of several assets on January 1 at a total cash price of $1,800,000. The estimated market values of the purchased assets are building, $890,000; land, $427,200; land improvements, $249,200; and five trucks, $213,600. Required 1. Allocate the lump-sum purchase price to the separate assets purchased. 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 12-year life and a $120,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a 10-year life and double-declining-balance depreciation. Analysis Component 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset’s life?
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, $499,800; land, $284,200; land improvements, $29,400; and four vehicles, $166,600.
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 $31,000 salvage value.3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.
Chapter 10 Solutions
Principles of Financial Accounting.
Ch. 10 - A company paid 326,000 for property that included...Ch. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Why is the Modified Accelerated Cost Recovery...Ch. 10 - Prob. 7DQCh. 10 - Identify events that might lead to disposal of a...Ch. 10 - Prob. 9DQCh. 10 - Is the declining-balance method an acceptable way...Ch. 10 - Prob. 11DQCh. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - Prob. 14DQCh. 10 - Prob. 15DQCh. 10 - APPLE On its recent balance sheet in Appendix A,...Ch. 10 - Prob. 17DQCh. 10 - Prob. 18DQCh. 10 - Prob. 19DQCh. 10 - Prob. 20DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - On January 1, the Matthews Band pays 65,800 for...Ch. 10 - Prob. 8QSCh. 10 - Revenue and capital expenditures 1. Classify the...Ch. 10 - Disposal of assets Garcia Co. owns equipment that...Ch. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 15QSCh. 10 - Caleb Co. owns a machine that had cost 42,400 with...Ch. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - NewTech purchases computer equipment for 154,000...Ch. 10 - Double-declining-balance depreciation In early...Ch. 10 - Straight-line depreciation and income effects P1...Ch. 10 - Double-declining-balance depreciation P1 Tory...Ch. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Revising depreciation C2 Apex Fitness Club uses...Ch. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Montana Mining Co. pays 3,721,000 for an ore...Ch. 10 - Milano Gallery purchases the copyright on a...Ch. 10 - Prob. 20ECh. 10 - Prob. 21ECh. 10 - Lok Co. reports net sales of 5,856,480 for Year 2...Ch. 10 - Prob. 23ECh. 10 - Prob. 24ECh. 10 - Prob. 1APCh. 10 - Prob. 2APCh. 10 - Prob. 3APCh. 10 - Prob. 4APCh. 10 - Yoshi Company completed the following transactions...Ch. 10 - Onslow Co. purchased a used machine for 178,000...Ch. 10 - On July 23 of the current year, Dakota Mining Co....Ch. 10 - On January 1, Falk Company signed a contract to...Ch. 10 - Nagy Company makes a lump-sum purchase of several...Ch. 10 - Prob. 2BPCh. 10 - Prob. 3BPCh. 10 - Prob. 4BPCh. 10 - Prob. 5BPCh. 10 - On January 1, Walker purchased a used machine for...Ch. 10 - Prob. 7BPCh. 10 - Prob. 8BPCh. 10 - Prob. 10SPCh. 10 - Prob. 1AACh. 10 - Prob. 2AACh. 10 - Prob. 3AACh. 10 - Prob. 1BTNCh. 10 - Prob. 5BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Timberly Construction makes a lump -sum purchase of several assets on January 1 at a total cash price of $850,000. The estimated market values of the purchased assets are building, $458, 150; land, $317,900; land improvements, $ 65,450; and four vehicles, $93,500. 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 $30,000 salvage value. 3. Compute the first -year depreciation expense on the land improvements assuming a five-year life and double-declining - balance depreciation.Complete this question by entering your answers in the tabs below.arrow_forwardTimberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $820,000. The estimated market values of the purchased assets are building, $547,250, land, $308,450, land improvements, $29,850, and four vehicles, $109,450. 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 $29,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.arrow_forwardTimberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $484, 500; land, $304,000; land improvements, $66,500; and four vehicles, $95,000. 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 $30,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining - balance depreciation.arrow_forward
- Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $820,000. The estimated market values of the purchased assets are building, $527,350; land, $308,450; land improvements, $49,750; and four vehicles, $109,450. 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 $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to th separate assets purchased. Total cost of Acquisition Allocation of total cost Building Land Land improvements Vehicles Total Estimated Market Value $ 0…arrow_forwardRequired 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 $810,000. The estimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600; and four vehicles, $147,200. 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-yea depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Required 2…arrow_forward[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 $840,000. The estimated market values of the purchased assets are building, $432,400; land, $282,000; land improvements, $37,600; and four vehicles, $188,000. 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 $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 18 Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Land…arrow_forward
- [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 $810,000. The estimated market values of the purchased assets are building, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. 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 $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Total cost of Acquisition Allocation of total cost…arrow_forwardTimberly 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, $514,100; land, $329,800; land improvements, $48,500; and four vehicles, $77,600. Allocate the lump-sum purchase price to the separate assets purchased.arrow_forwardRequired 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, $467,500, land, $243,100; land improvements, $56,100; and four vehicles, $168,300. 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 $29,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation. Complete this question by entering your answers in the tabs below. Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Required 1A Required 18 Required 2 Allocation of total cost Building…arrow_forward
- Foley Distribution Service pays $330,000 for a group purchase of land, bulding, and equipment At the time of acquisition, the land has a current market value of $36,000, the building's current market valu $36, 000, and the equipment's current market value is $ 283,000. Prepare a schedule allocating the purchase price of 5330.000 to each of the individual assets purchased based on their relative market val journalize the lump - sum purchase of the three assets. The business signs a note payable for the purchase pricearrow_forwardLexington 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.arrow_forwardAccounting Sleepy Ltd negotiated a purchase of land, building and equipment from Bambi Corp. The purchase was completed on June 28, 2021 at a total cash cost of $800,000. The estimated market value of each asset at the time was: land, $330,000; building, $520,000; and machinery, $150,000. Required: 1. Prepare journal entries to record each of the purchase of the assets on June 28, 2021. 2. How much depreciation will be recorded for the December 31, 2021 year end assuming declining balance depreciation years and 5 years on the machinery? Company policy is to start depreciating assets at the beginning of the month following acquisition. on the building over 40arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage Learning
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Depreciation -MACRS; Author: Ronald Moy, Ph.D., CFA, CFP;https://www.youtube.com/watch?v=jsf7NCnkAmk;License: Standard Youtube License