Timberly Construction negotiates a lump-sum purchase of several assets from a co

Question

Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2016, at a total cash price of $800,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $444,150; land, $264,600; land improvements, $47,250; and four vehicles, S189,000. The company's fiscal year ends on December 31. Required: 1.1 Prepare a table to allocate the lump-sum purchase price to the separate assets purchased location of Total Appraised Percent of Total Total cost of Apportioned Cost Value ppraised Value uisition Cost Building Land Land improvements Vehicles Total

Explanation / Answer

1.1 Allocation of total cost Appraised Value Percent of Total Appraised Value x Total cost of Acquisition Apportioned Cost Building $444,150 47% x $800,000 $376,000 Land 264,600 28% x $800,000 $224,000 Land improvements 47,250 5% x $800,000 $40,000 Vehicles 189,000 20% x $800,000 $160,000 Total $945,000 100% 800000 1.2 Date General Journal Debit Credit 1-Jan Building 376,000 Land 224,000 Land improvements 40,000 Vehicles 160,000 Cash 800,000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.