Question

Pittsfield Sound Center pays $300,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $190,000, the building's current market value is 599,000 and the equipment's current market value is $33,000. Prepare a schedule allocating the purchase price of $300,000 to each of the individual assets purchased based on their relative market values, then joumalize the lump sum purchase of the three assets. The business signs a note payable for the purchase price u s, en joumalize the lump sum purchase of the three assets. The business Prepare a schedule allocating the purchase price of $300,000 to each of the individual assets purchased based on their relative mat signs a note payable for the purchase price Begin by preparing a schedule allocating the purchase price of $300,000 Market (Bales Percentage of Total Marit Value Costo Asset Land Equipment

Answer 1

Schedule allocating the purchase price :
Asset	Market (Sales) Value	Percentage of Total - Market Value	Cost of each asset
Land	198000	60%	180000 [ 300000*60% ]
Building	99000	30%	90000 [ 300000*30% ]
Equipment	33000	10%	30000 [ 300000*10% ]
Total	330000	100%	300000

Journal entry :
	Dr.	Cr.
Land	180000
Building	90000
Equipment	30000
Note payable		300000