Plant acquisitions for selected companies are as follows.

1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump sum price of $700,000. At the time of purchase, Torres assets had the following book and appraisal values.

To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.

2. Harry Enterprises purchased store equipment by making a $2,000 cash down payment and signing a 1-year, $23,000, 10% note payable. The purchase was recorded as follows.

3. Kim Company purchased office equipment for $20,000, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:

4. Kaisson Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $27,000. The company made no entry to record the land because it had no cost basis.
5. Zimmerman Company built a warehouse for $600,000. It could have purchased the building for $740,000. The controller made the following entry.

Instructions
Prepare the entry that should have been made at the date of eachacquisition.

Transcribed Image Text:

Land Buildings Equipment Book Values $200,000 250,000 300,000 Appraisal Values $150,000 350,000 300,000 Land Buildings Equipment 150,000 250,000 300,000 Cash 700,000 Store Equipment 27,300 Cash Note Payable Interest Payable 2,000 23,000 2,300 Office Equipment 20,000 Cash Purchase Discounts 19,600 400 Warehouse 740,000 Cash Profit on Construction 600,000 140,000