Required 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. $451,200; land, $253,800;land Improvements, $37,600; and four vehicles, $197,400. Required: -a. Allocate the lump-sum purchase price to the separate assets purchased. -b. Prepare the journal entry to record the purchase. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 alvage value. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance lepreciation.
Required 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. $451,200; land, $253,800;land Improvements, $37,600; and four vehicles, $197,400. Required: -a. Allocate the lump-sum purchase price to the separate assets purchased. -b. Prepare the journal entry to record the purchase. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 alvage value. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance lepreciation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A-2
![Required 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, $451,200; land, $253,800; land improvements, $37,600;
and four vehicles, $197,400.
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.
Required 1B Required 2
Allocate the lump-sum purchase price to the separate assets purchased.
Allocation of total
cost
Total cost of
Acquisition
Required 1A
Building
Land
Land improvements
Vehicles
Total
Estimated
Market Value
$
$
451,200
253,800
37,600
197,400
940,000
Required 3
Percent of Total
48 %
27 % × $ 830,000
% x $ 830,000
2
x $ 830,000
75 %
x
< Required 1A
$830,000
Apportioned
Cost
S 398,400
S 398,400
Required 1B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50f93fc1-db2c-491e-8e74-bd6466cd1a44%2Fcea5e440-4145-44c4-8d27-37ea07c3385b%2Fspnhb3_processed.png&w=3840&q=75)
Transcribed Image Text:Required 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, $451,200; land, $253,800; land improvements, $37,600;
and four vehicles, $197,400.
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.
Required 1B Required 2
Allocate the lump-sum purchase price to the separate assets purchased.
Allocation of total
cost
Total cost of
Acquisition
Required 1A
Building
Land
Land improvements
Vehicles
Total
Estimated
Market Value
$
$
451,200
253,800
37,600
197,400
940,000
Required 3
Percent of Total
48 %
27 % × $ 830,000
% x $ 830,000
2
x $ 830,000
75 %
x
< Required 1A
$830,000
Apportioned
Cost
S 398,400
S 398,400
Required 1B >
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