The accounts of Haley-Davis Printing Company include Land,Buildings, and Equipme

Question

The accounts of Haley-Davis Printing Company include Land,Buildings, and Equipment. Haley-Davis has a separate accumulateddepreciation account for each asset. During 2007, the companycompleted the following transactions: Jan.1 Traded in equipmentw/accumulated depreciation of $90,000 (cost of $130,000) forsimilar new equipment. Haley-Davis also paid $80,000 cash. July 1 Sold a building that cost$550,000 and that had accumulated depreciation of $250,000 throughDecember 31 of the preceding year. Haley-Davis received $100,000cash and a $200,000 note receivable. Depreciation is computed on astraight-line basis. The building has a 40-year useful and aresidual value of $50,000. Aug. 31 Purchased land and a buildingfor a lump-sum payment of $300,000. And independent appraisalvalued the land at $105,000 and the building at $210,000. Just need help with August 31entry which requires to record the purchase of the land andbuilding. Thats All. Please help.!!! Thankyou. The accounts of Haley-Davis Printing Company include Land,Buildings, and Equipment. Haley-Davis has a separate accumulateddepreciation account for each asset. During 2007, the companycompleted the following transactions: Jan.1 Traded in equipmentw/accumulated depreciation of $90,000 (cost of $130,000) forsimilar new equipment. Haley-Davis also paid $80,000 cash. July 1 Sold a building that cost$550,000 and that had accumulated depreciation of $250,000 throughDecember 31 of the preceding year. Haley-Davis received $100,000cash and a $200,000 note receivable. Depreciation is computed on astraight-line basis. The building has a 40-year useful and aresidual value of $50,000. Aug. 31 Purchased land and a buildingfor a lump-sum payment of $300,000. And independent appraisalvalued the land at $105,000 and the building at $210,000. Just need help with August 31entry which requires to record the purchase of the land andbuilding. Thats All. Please help.!!! Thankyou. Just need help with August 31entry which requires to record the purchase of the land andbuilding. Thats All. Please help.!!! Thankyou.

Explanation / Answer

   Property          Fair Value Land                  $105,000 Building              $ 210,000 total                    $315,000 Acquisition cost : Land = $300,000 X $105,000 / $315,000 = $100,000 Building = $300,000 X $210,000 / $315,000 = $200,000 Entry:                                       Dr.             Cr. Land                           $100,000 Building                       $200,000          Cash                                   $300,000 Acquisition cost : Land = $300,000 X $105,000 / $315,000 = $100,000 Building = $300,000 X $210,000 / $315,000 = $200,000 Entry:                                       Dr.             Cr. Land                           $100,000 Building                       $200,000          Cash                                   $300,000

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