Carver Inc. purchased a building and the land on which the building is situated for a total

Question:

Carver Inc. purchased a building and the land on which the building is situated for a total cost of $700,000 cash. The land was appraised at $320,000 and the building at $480,000.

Required

a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.

b. Would the company recognize a gain on the purchase? Why or why not?

c. Record the purchase in a statements model like the following one:

Carver Inc. purchased a building and the land on which

d. Record the purchase in general journal format.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamental Financial Accounting Concepts

ISBN: 978-0078025907

9th edition

Authors: Thomas Edmonds, Christopher Edmonds

See More Books

Question Posted: Apr 20, 2015 07:29 AM

See More Questions

Estrada Inc. purchased a building and the land on which the building is situated for a total cost of $600,000 cash. The land was appraised at $210,000 and the building at $490,000. Required a....
Illinois Company purchased a building and the land on which the building is situated for a total cost of $1,200,000 cash. The land was appraised at $600,000 and the building at $1,000,000. Required...
Zeidler Company bought a building and the land on which the building is located for a total cash price of $ 356,000. The company paid transfer costs of $ 4,000. Renovation costs on the building were...
Jogger 1 is travelling east at 6 . 5 m / s and has a mass of 8 2 kg . Jogger 2 is travelling north at 5 . 8 m / s and has a mass of 5 4 . 5 kg . One of the joggers has their head down and doesnt see...
The Pickett Marketing Firm is developing a new Web-based media campaign for a client. The following table describes the relationships between the activities that need to be completed. (a) Develop a...
There are 10 workers in Thailand and each can produce either 2 computers or 30 tons of rice. There are 20 workers in the United States and each can produce either 5 computers or 40 tons of rice. a....
Detecting errors in an accounting system Melanie Jacobs accounting system that uses sales, purchases, cash receipts and cash payments journals and a general journal. At various times during the year,...
Use Pareto analysis to investigate the following data collected on a printed-circuit-board assembly line: Number of Defect Defect Occurrences Components not adhering............ 143...
Handshake owns and manages a small manufacturing business in Narok town. The following balances have been extracted from his books of account at 31 December 2018: Dr Cr Sh. Sh. Capital 1,711,200...
Marco Company shows the following costs for three jobs worked on in April. Job 306 Job 307 Job 308 $ 25,000 $ 43,000 21,000 10,500 16,000 8,000 Balances on March 31 Direct materials used (in March)...
Southwest Milling Co. purchased a front-end loader to move stacks of lumber. The loader had a list price of $140,000. The seller agreed to allow a 4 percent discount because Southwest Milling paid...
Pitney Co. purchased an office building, land, and furniture for $500,000 cash. The appraised value of the assets was as follows: Land ........$180,000 Building ..... 300,000 Furniture ..... 120,000...
Consider these six values a population: 13, 3, 8, 10, 8, and 6. a. Determine the mean of the population. b. Determine the variance.
Identify key areas of law (concepts and principles) appropriately to discuss the issues and propose a direction to address the issues
Hope and Love Hospital operates in Northern Illinois. Their Chief Finance Officer (CFO), who goes by Saint Valentine, reached out to Bank of Cupid, LLC earlier in the year and opened a line of credit...
What right and wrong Aubin - Plaintiff did and Unilever did? What lessons withdrawn from this case? And give some recommendations for both Aubin - Plaintiff and Unilever to win the case and avoid the...
Suppose that the risk-free rate is 5 percent and the expected return on the tangency portfolio of risky assets is 14 percent. An investor with $3 million to invest wants to achieve a 18.5 percent...
What are the elements of the tort of negligence? What are the defenses to a negligence claim? Under which circumstances can a professional be liable for his wrongdoings?
Record the transactions of Dr James Smith in Question 6.9 into the general journal. Data from Question 6.9. Dr James Smith has a successful dental practice. An extract was taken from his records....
The electric field due to a line charge is given by where l is a constant. Show that E is solenoidal. Show that it is also conservative. E =
McAlpin Clinics provides medical care in three departments: internal medicine (IM), pediatrics (PD), and obstetrics gynecology (OB). The estimated costs to run each department follow. McAlpin expects...
Maller Manufacturing Company makes two different products, M and N. The company's two departments are named after the products; for example, Product M is made in Department M. Maller's accountant has...
The Brower School of Vocational Technology has organized the school training programs into three departments. Each department provides training in a different area as follows: nursing assistant,...
Baillie Power leased high-tech electronic equipment from Courtney Leasing on January 1, 2024. Courtney purchased the equipment from Doane Machines at a cost of $252,000, its fair value. Note: Use...
The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales Cost of goods sold Gross profit $894,000...
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations:...

Carver Inc. purchased a building and the land on which the building is situated for a total

Question:

Assets - Liab. Eqity Rev ExpNet Inc. Cash Flow Cash + Land Building

Step by Step Answer:

a of Purchase Allocated Total Appraised Value App Val Price Cost Land 32000...View the full answer

Fundamental Financial Accounting Concepts

Students also viewed these Accounting questions