Question

Exercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriquez Company pays $355,000 for real estate plus $18,815 in closing costs. The real estate consists of land appraised at $196,000; land improvements appraised at $73,500; and a building appraised at $220,500. Required: 1. Allocate the total cost among the three purchased assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Appraised Value Percent of Total 'x Total Cost of Appraised Acquisition Apportioned Cost Value Land Land improvements Building Totals Required 1 Required 2 >

Answer 1

1
	Appraised Value	Percent of Total Appraised Value	x Total Cost of Acquisition	Apportioned Cost
Land	196,000	40%	× 373815	149,526.00
Land improvements	73,500	15%	× 373815	56,072.25
Building	220,500	45%	× 373815	168,216.75
Totals	490,000	100%		373,815.00
2
Transaction	General Journal	Debit	Credit
1	Land	149,526.00
	Land improvements	56,072.25
	Building	168,216.75
	Cash		373,815.00