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Required information

Problem $8-1$A $($Algo$)$ Plant asset costs; depreciation methods LO C$1,$ P$1$

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$0\mathrm{.}76$

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Timberly Construction makes a lump$-$sum purchase of several assets on January $1$ at a total cash price of

$$840,000.$ The estimated market values of the purchased assets are building, $$448,350$; land, $$256,200$;

land improvements, $$45,750$; and four vehicles, $$164,700.$

Problem $8-1$A $($Algo$)$ Part $1-3$

Required:

$1-$a$.$ Allocate the lump$-$sum purchase price to the separate assets purchased.

$1-$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 $$32,000$ salvage value.

Compute the first$-$year depreciation expense on the land improvements assuming a five$-$year life and double$-$

declining$-$balance depreciation.

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Allocate the lump$-$sum purchase price to the separate assets purchased.