Allocation of Package Purchase Price and Depreciation Methods To expand its business, Renee Company paid $760,000...

 

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Allocation of Package Purchase Price and Depreciation Methods To expand its business, Renee Company paid $760,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Renee hired a consultant for $10,000 to appraise the assets. The appraised values were as follows Assessed Property Value $120,000 Land Buiding Trucks 440,000 144,000 Equipment Total 96,000 $800,000 Renee issued two checks totaling $770,000 to acquire the assets and pay the consultant on July 1. Renee depreciated the assets using the straight-line method on the building and on the equipment, and the double-declining balance method on the trucks, Estimated useful lives and salvage values were as follows: Salvage Useful Life Value Building 20 years $42,000 Trucks 4 years 15,000 Equipment 8 years 10,000 a Calculate the amounts allocated to the varidus types of plant assets acquired on July 1. Asset Total Land E 115.500 423500 Building Trucks 138,600 Equipment 92,400 b. Prepare the july 1 journal entry to record the purchase of the assets and the payment to the consultant. Combine both cash disbursements into one journal entry. General Journal Date Description Debit Credit July 1 Land 115,500 423.500 Builiding Trucks 138,600 Equipment 92,400 Cash 770,000 To record purchase of plant assets and payment to consultant c. Prepare the December 31 journal entries to record depreciation expense for the year on the building trucks, and equipment. (Round to the nearest dollar) General journal Description Dec. 31 Depreciation Espense Building Accumulated Depreciation Building Date Debit Credit S.150 N To record deprecation on buildinc Dec 31 Deprecation Expense- Trucks Accurmulated Depreciation Trucks %3B 34650 34650 To record depreciation on trucks Dec. 31 Depreciation Expense Equipment Accumulated Depreciation- Equipment To record depreciation on equipment. 23100 x Check Allocation of Package Purchase Price and Depreciation Methods To expand its business, Renee Company paid $760,000 for most of the property, plant, and equipment of a small trucking company that was going out of business. Before agreeing to the price, Renee hired a consultant for $10,000 to appraise the assets. The appraised values were as follows Assessed Property Value $120,000 Land Buiding Trucks 440,000 144,000 Equipment Total 96,000 $800,000 Renee issued two checks totaling $770,000 to acquire the assets and pay the consultant on July 1. Renee depreciated the assets using the straight-line method on the building and on the equipment, and the double-declining balance method on the trucks, Estimated useful lives and salvage values were as follows: Salvage Useful Life Value Building 20 years $42,000 Trucks 4 years 15,000 Equipment 8 years 10,000 a Calculate the amounts allocated to the varidus types of plant assets acquired on July 1. Asset Total Land E 115.500 423500 Building Trucks 138,600 Equipment 92,400 b. Prepare the july 1 journal entry to record the purchase of the assets and the payment to the consultant. Combine both cash disbursements into one journal entry. General Journal Date Description Debit Credit July 1 Land 115,500 423.500 Builiding Trucks 138,600 Equipment 92,400 Cash 770,000 To record purchase of plant assets and payment to consultant c. Prepare the December 31 journal entries to record depreciation expense for the year on the building trucks, and equipment. (Round to the nearest dollar) General journal Description Dec. 31 Depreciation Espense Building Accumulated Depreciation Building Date Debit Credit S.150 N To record deprecation on buildinc Dec 31 Deprecation Expense- Trucks Accurmulated Depreciation Trucks %3B 34650 34650 To record depreciation on trucks Dec. 31 Depreciation Expense Equipment Accumulated Depreciation- Equipment To record depreciation on equipment. 23100 x Check

Answer rating: 100% (QA)

Solution of all three parts are given below Requirement a Values are calculated like this Al... View the full answer