FINANCIAL+MANAG.ACCT.
9th Edition
ISBN: 9781260728774
Author: Wild
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 3E
To determine
Concept Introduction:
Lump-sum purchase: When a group of plant assets is purchased as single transactions, this type of purchase occurs the cost of purchase of this acquisition is based on relative market values, which are estimated by using tax-assessed valuations of the assets.
The allocation of total cost among three assets and prepare the journal entries to record the purchase.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Rodriguez Company pays $395,380 for real estate with land, land improvements, and a building. Land is appraised at $157,040; improvements are appraised at $58,890and a building is appraised at $176,670. Required: 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.
Rodriguez Company pays $395,380 for real estate with land, land improvements, and a building. Land is appraised at $157,040; land improvements are appraised at $58,890; and the building is appraised at $176,670. 1. Allocate the total cost among the three assets.2. Prepare the journal entry to record the purchase.
Rodriguez Company pays $395,380 for real estate with land, land improvements, and a building. Land is appraised at $157,040; land
improvements are appraised at $58,890, and the building is appraised at $176,670.
1. Allocate the total cost among the three assets.
2. Prepare the journal entry to record the purchase.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Allocate the total cost among the three assets.
Land
Land improvements
Building
Totals
Appraised
Value
5
0
Percent of Total
Appraised Value
0%
Total Cost of
Acquisition
-Apportioned Cost
Required 2 >
Chapter 8 Solutions
FINANCIAL+MANAG.ACCT.
Ch. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Prob. 3QSCh. 8 - Prob. 4QSCh. 8 - Prob. 5QSCh. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QS
Ch. 8 - Prob. 11QSCh. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Prob. 14QSCh. 8 - Prob. 15QSCh. 8 - Prob. 16QSCh. 8 - Prob. 17QSCh. 8 - Prob. 18QSCh. 8 - Prob. 19QSCh. 8 - Prob. 20QSCh. 8 - Prob. 21QSCh. 8 - Prob. 22QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Prob. 17ECh. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - Prob. 23ECh. 8 - Prob. 24ECh. 8 - Prob. 25ECh. 8 - Prob. 26ECh. 8 - Prob. 1PSACh. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Prob. 6PSACh. 8 - Prob. 7PSACh. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Prob. 3PSBCh. 8 - Prob. 4PSBCh. 8 - Prob. 5PSBCh. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1.1AACh. 8 - Prob. 1.2AACh. 8 - Prob. 1.3AACh. 8 - Prob. 1.4AACh. 8 - Prob. 2.1AACh. 8 - Prob. 2.2AACh. 8 - Prob. 2.3AACh. 8 - Prob. 3.1AACh. 8 - Prob. 3.2AACh. 8 - Prob. 3.3AACh. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - Prob. 10DQCh. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Prob. 4BTN
Knowledge Booster
Similar questions
- Rodriguez Company pays $342,225 for real estate with land, land improvements, and a building. Land is appraised at $212,000; land improvements are appraised at $106,000; and the building is appraised at $212,000. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers Required 1 Required 2 Allocate the total cost among the three assets. (Round answers to 2 decimal places.) Percent of Total Appraised Value Appraised Value x Total Cost of Acquisition = Apportioned Cost Land Land improvements Building Totals Required 1 Required 2 >arrow_forwardRodriguez Company pays $405,405 for real estate with land, land improvements, and a building. Land is appraised at $238,500; land improvements are appraised at $79,500; and the building is appraised at $212,000. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers Required 1 Required 2 Prepare the journal entry to record the purchase. (Rour places.) View transaction list Journal entry worksheet A Record the costs of lump-sum purchase. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View generalarrow_forwardRodriguez Company pays $358,020 for real estate with land, land improvements, and a building. Land is appraised at $164,000; land improvements are appraised at $82,000; and the building is appraised at $164,000. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers Required 1 Required 2 Allocate the total cost among the three assets. (Round answers to 2 decimal places.) Appraised Value Percent of Total Appraised Value x Total Cost of = Apportioned Acquisition Cost Land Land improvements Building Totals Required 2arrow_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, $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 $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?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, $487,500; land, $302,250; land improvements, $58,500; and four vehicles, $126,750. 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 $32,000 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
- 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.arrow_forwardFoley 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_forwardTimberly 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_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_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_forwardRodriguez Company pays $389,610 for real estate with land, land improvements, and a building. Land is appraised at $184,500; land improvements are appraised at $61,500; and the building is appraised at $164,000. 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three assets. Note: Round your "Apportioned Cost" answers to 2 decimal places. Percent of Total Appraised Value Appraised Value x Total Cost of Acquisition Apportioned Cost Land $ 184,500 x 389,610 Land improvements 61,500 x 389,610 Building 164,000 x 389,610 Totals $ 410,000 0% $ 0.00arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education