Answered: How would FedEx divide a $120,000…

How would FedEx divide a $120,000 lump-sum purchase price for land, building,and equipment with estimated market values of $40,000, $95,000, and $15,000,respectively?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3RE: Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is...

See similar textbooks

Related questions

Q: Sisig Corp. has the following information in its notes to the financial statements: • Land held for…

A: Investment property means land or building or part of building or land and building that is held for…

Q: Charles Company owns a building that originally cost P400,000 and has a current book value of…

A: Here in this question we are required to calculate initial cash outflow. For calculating that first…

Q: Dorel Company is being purchased and has the following balance sheet as of the purchase date: $…

A: Net assets of Dorel = Current assets + Fair value of fixed assets - fair value of current…

Q: During 2020, the Tidel Company completed the following transactions related to its property, plant,…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: P20,000,000. The supplier provides the entity one additional truck of the same kind with a fair…

A: whenever a company purchase it's asset is recording is done in the balance sheet at historical cost…

Q: Sisig Corp. purchases a building with land at a cost of P100,000,000. In the sale and purchase…

A: Investment property is the capital assets that are used to earn rental income or capital…

Q: Suppose you have purchased land, a building, and some equipment. At the time of the acquisition, the…

A: Total fir value = land's fair value + building’s fair value + equipment’s fair value = $75,000 +…

Q: Identify how much to add or deduct from the Investment in Associate account of ABC based on the…

A: Investment in Associate means the investment in an organization in which the investor has important…

Q: A company with a Tax Rate of 20% is going to sell a fixed asset with a Book Value of $334,000 for a…

A: The value at which a company disposed of its used assets is term as the salvage value.

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: Purchase Price P 40,00,000.00 Cots Incurred Buying P…

Q: A company that decides to value a project in which it wants to enter, presents the information in…

A: NPV means PV of net benefits which will arise from the project in coming years. It is equal to the…

Q: On August 30, 2020, AAA Company purchased a tract of land for P12,000,000. AAA incurred additional…

A: Cost of land = P12,000,000 Additional cost = P3,000,000 Total cost = P15,000,000

Q: Tanaka Company has land that cost $15,000,000. Its fair value on December 31, 2020, is $20,000,000.…

A: Assets are carried at the fair value on the date of revaluation under revaluation model for…

Q: What is the capitalized cost of the acquired PPE if ABC Corp. made the following property…

A: At the time of acquiring fixed assets, purchase price paid along with all other costs which are…

Q: Old equipment with a book value of P15,000 will be replaced by new equipment with a purchase price…

A: Fixed capital investment = 50,000 Salvage value = 11,000 Book value = 15,000 Freight chharges =…

Q: cost of P6,200,000. At December 31, 2021, the market value San Jose Realty Corporation acquired a…

A: An investment property is a piece of real estate purchased with the intention of earning a return on…

Q: Suppose Speedy Delivery pays $62 million to buy Lone Star Overnight. The fair valueof Lone Star’s…

A: Answer: D. $6 Million

Q: If the purchase price is 420000 OMR under IFRS, the market value of the net assets is 480000 OMR and…

Q: San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction…

A: San Jose Realty Corporation Acquired a tract of land on Jan 1, 2020, for P20 million Transaction…

Q: acquire the net assets of Best Company. Better is willing to pay for goodwill computed by…

A: Goodwill is the intangible assets for the company and when would will eat self generated it is not…

Q: Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the…

A: The question is related to Property, Plant and Equipment. The details of lump sum group purchase is…

Q: SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair…

A: Introduction: - The total purchase cost for all three assets is obtained using the proportion method…

Q: The following information refers to Questions No. 13 through 15: The financial manager of Apple Co.…

Q: Luqman Corporation usually depreciates its assets on a straight line basis to zero value. This…

Q: ABC Co. acquired land, buildings, and equipment from XYZ Co. at a lump-sum price of P1,800,000. ABC…

A: Answer Lum- sum price = P1,800,000 appraisal = P120,000

Q: Island, Inc. made a basket purchase involving four assets. Their market values were A: $56,000: B:…

A: Total market value of 4 assets = A + B +C + D = 56000+42000+44000+58000 = $200,000

Q: which bid is more beneficial to APT, if money is worth 10% effective?

A: Bidder A Total Amount Offered 10 Million Down Payment (20%) 2 Million…

Q: Better Company is negotiating to acquire the net assets of Best Company. Better is willing to pay…

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: Purchase Price P 40,00,000.00 Cots Incurred Buying P…

Q: On January 1, 2020, Marshall acquired an investment for P500,000 plus a purchase commission of…

A: Under FTOCI investment should be measured at fair value on year end

Q: On December 31, 2014, CHARLIE acquired an investment for P500,000 plus a purchase commission of…

A: Fair value through other comprehensive income account represents the unrealized gain/loss on the…

Q: What amount should Draco Malfoy report as earnings from subsidiary in its 2020 income statement? а.…

A: Business combination is the merger of two or more than two companies into a single company or even…

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: 1. Cost of the land to be recognized in the accounting books Purchase Price…

Q: On January 1, 2020, Azure Corporation purchased Sparrow Corporation for $20 million. Of the $20…

A: Goodwill: It is an intangible asset and represents a business reputation. It is recognized when a…

Q: have a total fair value of P5,000,000 while the fair value of the land is P5,100,000. b. Purchased…

A: When a fixed asset is purchased all the costs associated with it untill it is ready for its intended…

Q: What is the capitalized cost of the acquired PPE if ABC Corp. made the following property…

A: A capitalized cost is an expense incurred on the purchase of the fixed assets. The fixed asset…

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: The intrinsic value of a property is the replacement cost of the property, i.e., the price of an…

Q: Perfect Accruals Inc., purchased an asset five years ago for a cost of $950,000. The asset has a CCA…

A: Capital cost allowance (CCA) is a way of charging depreciation on fixed assets for which deduction…

Q: The Asset Privatization Trust had put up for sale a machine tools manufacturing plant. There were…

A: Effective rate (r) = 10% Bidder A annual payment (A) = P 1 million for 8 years Bidder B semiannual…

Q: If the company's assets in TL: cash 100.000, accounts receivable 50.000, inventory 150.000, and…

A: The goodwill is calculated as excess of purchase price over net value of assets.

Q: Cozzi Company is being purchased and has the following balance sheet as of the purchase date:…

A: Goodwill is an intangible asset that accounts for the excess purchase price of another company.…

Q: the initial total acquisition cost of the Property, Plant, and Equipment

A: Total acquisition costs are the costs incurred to bring the fixed assets into present location and…

Q: Counting Crow’s investment property has a carrying amount of ₱3,600,000 under the fair valuemodel,…

A: Investment properties are land or buildings and building can be a part of building. the land and…

Q: P18,000. As a percentage of the initial cost, what is the straight-line depreciation rate of the…

A: Depreciation: It is the expense charge on the asset over the period of life. This expense…

Question

How would FedEx divide a $120,000 lump-sum purchase price for land, building,
and equipment with estimated market values of $40,000, $95,000, and $15,000,
respectively?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Compute the percentage share:

VIEW

Compute the cost of each asset:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Property, Plant and Equipment

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

How would QuickPick divide a $145,000 lump-sum purchase price for land, building, and equipment with estimated market values of $56,100, $78,200, and $35,700, respectively? (Round interim calculations to the nearest tenth of a percent, X.X%, and your final answers to the nearest whole dollar.) Estimated Market Cost of Value Each Asset Land. . . . . . . . . . . . $56,100 Building. . . . . . . . . . $78,200 Equipment. . . . . . . . $35,700 Total $170,000
ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly attributable costs incurred was P250,000. If ABC were to resell this land now, it would incur cost to sell of P400,000. The following rates were gathered. Weighted average cost of capital 15% Land average price increase per year 18% Inflation rate 4% Required: Assuming that ABC plans to sell the asset by the end of the fifth year, compute the following: 1. Intrinsic value
- How much was the investment acquisition cost at July 1, 2020? A.P515,100 B. P510,000 C. P509,400 D. P504,900 - What is the investment carrying amount at December 31, 2020? A. P647,600 B. P550,000 C. P541,350 D. P536,250
Suppose Speedy Delivery pays $62 million to buy Lone Star Overnight. The fair value of Lone Star’s assets is $80 million, and the fair value of its liabilities is $24 million. How much goodwill did Speedy Delivery purchase in its acquisition of Lone Star Overnight?
San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction costs paid by San Jose relating to its acquisition amounted to P800,000. The tract of land was subdivided into 400 residential lots, having an area of 200 square meters each, after making provision for public and common roads, incurring additional cost of P6,200,000. At December 31, 2021, the market value per lot was P250,000. As of December 31, 2022, 380 lots were sold and the market value of each lot had increased to P270,000. On this date, the company decided to transfer the remaining unsold lots into investment property that is to be carried under the fair value model. What amount of gain should San Jose Realty recognize as a result of the transfer from inventory to investment property? a. 5,400,000 b. 4,500,000 c. 4,050,000 d. 1,350,000
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.
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.
On October 7, 2020, Grace Gems purchased a basket of assets for the lump-sum price of $150,000. The fair market values of the assets Grace purchased were as follows: U.S. government securities $10,000 Land 36,000 Building 90,000 Equipment 15,000 Furniture 9,000 What is Grace's basis in the building? $84,375 $90,000 $105,000 $114,000
Sisig Corp. purchases a building with land at a cost of P100,000,000. In the sale and purchase agreement, P20,000,000 of the purchase price is attributed to the land. The building consists of 12 floors of equal space. Sisig Corp. also incurs the following costs in connection with the purchase of the property: legal and agency fees, P3,000,000; soft-launching cost to market for tenants; P500,000 and administrative expenses, P200,000.Assuming Sisig Corp. cannot sell the floors separately and uses one-half of the ground floor or 5% of the entire building for administrative purposes, and the rest of the floor area are let out to tenants, at what amount the investment property should be initially recognized?
On January 1, 2020, Marshall acquired an investment for P500,000 plus a purchase commission of P10,000. The investment is designated as financial asset at fair value through other comprehensive income. On December 31, 2020, quoted market price of the investment is P500,000. If the investment were sold, a commission of P15,000 would be paid. On December 31, 2020, the investment should be carried at A.P485,000B.P500,000C.P495,000D.P510,000
ABC Corporation acquired an asset for a purchase price of P1,200,000. This is expected to appreciate every yearby 5%. The entity will be incurring P50,000 cost to dispose the asset by the end of its 20-year investment period. If the cost to finance this investment is 4%, what is the intrinsic value of the asset after accounting for the cost of illiquidity? a. P1,583,626.69 b. P1,430,297.18 c. P8838,969.98 d. P972,129.05 e. None among the other choices
ABC Co. acquired land, buildings, and equipment from XYZ Co. at a lump-sum price of P1,800,000. ABC Co. paid P120,000 for the appraisal of the assets, which revealed these values: Land:P1,200,000 Buildings: P800,000 Equipment:P400,000 What cost should be assigned to the land?