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, 2017, 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. $476,850: land. $317.900: land improvements, $56,100; and four vehicles. $84,750. The company's fiscal year ends on December 31. Required: 1-a. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased, 1-b. Prepare the journal entry to record the purchase. 2. Compute the depreciation expense for year 2017 on the building using the straight-lne method, assuming a 15-year life and a $31.000 salvage value. 3. Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining balance depreciation. Complete this question by entering your answers in the tabs below. Required 1A equired 18 Required 2 Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. Allocation of total Appraised Percent of Total T otal cost of Apportioned cost Value Appraised Value Acquisition Cost Building Reged 10 >

Answer 1

1(a)

Allocation of Total Cost	Appraised Value	%of total appraised value	Total cost of acquisition	Acquisition Cost
Building	476850	51%	800000	408000
Land	317900	34%	800000	272000
Land Improvements	56100	6%	800000	48000
Vehicles	84150	9%	800000	72000
Total	935000	100%		800000

1(b)

Journal Eutrien Dali Practiculars bebit LAOLA Jan. 1 408000 alm. 2/2010 Building Alc Land All Land auprovant Au Vehicles All ala. 48000 42,000 To Cash ALL 85000 assets pranchased in Cash )

1(c)

110 Claulalian of Depreciation and Building Useful life of the Asset 15 yeam. a Salvage Value = 31,000 Amount of seph to be charged cast - e Radio spabaigration doel ost - Salv Salvage Vale! Useful life = 408000 - 31000 AN 15 O & 25133.33 Depreciation Expens for the year amonti to 7 25133.33

1(d)

@ Claulation of Depreciation an Land impruments Cost of Land aimpronandhand 48000 Useful life 5 year. :. Arant of Depin to the changed on douter declining balana depreciation technique - 48000 x 2 =9600x2 - 19200 - Degunciation Expon amont i 19200/-