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, $439,300; land, $286,500; land improvements, $28,650; and four vehicles, $200,550.

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 $29,000 salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.

Please answer in this format

    

Transcribed Image Text:

Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Land improvements Vehicles Total Appraised Value $ 0 Percent of Total Appraised Value % % % % 0 % X X X X X Total cost of Apportioned Acquisition Cost $ 0 Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Land improvements Vehicles Total Appraised Value $ 0 Percent of Total Appraised Value % % % % 0 % X X X X X Total cost of Apportioned Acquisition Cost $ 0

Answer rating: 100% (QA)

1a Allocate the lumpsum purchase price to the separate assets purchased Allocation of total cost App... View the full answer