Question

Problem 10-1 Acquisition costs (LO10-1, 10-2, 10-3, 10-4] Tristar Production Company began operations on September 1, 2018. Listed below are a number of transactions that occurred during its first four months of operations. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) ok 1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $180,000 in cash for the property. According to appraisals, the land had a fair value of $134,000 and the building had a fair value of $66,000. 2. On September 1, Tristar signed a $48,000 noninterest-bearing note to purchase equipment. The $48,000 payment is due on September 1, 2019. Assume that 9% is a reasonable interest rate. 3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,300. On September 18, the company paid its lawyer $7,000 for organizing the corporation. 5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $23,000 and $900 in freight charges also were paid. 6. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $6,300 normal cash price. The supplier agreed to accept 200 shares of the company's nopar common stock in exchange for the equipment. The fair value of the stock is not readily determinable. 7. On December 10, the company acquired a tract of land at a cost of $28,000. It paid $6,000 down and signed a 11% note with both principal and interest due in one year. Eleven percent is an appropriate rate of interest for this note. nces Penuired

Answer 1

solutions Transaction Exedit($) Journal Entries General Journal .. Land Building cash {to record acquisition of land with Building) Debit($) $120,000 $ 59,400 $190,000 . Equipment . $44,037 Discount on notes payable $ 3,963. Notes Роуаblе. (to record equipment purchased) .. $48.000 $3,300 3 ТЧис. Revenue- Donation of asset (to record Donation. Given) $3,300

$1,000 $7,000 Organisation Expense Cash (to record organisation expense paid) vo $73,900 $23,900 naintenance Equipment - Cash (to record equipment . Purchased) $6,500 $ 6,300 Office Equipment ... common stock. 2 to record stock exchange . Con escuipment) Land : $28,000 :cash $61000 $221000 Notes Payable (to record land acquired)

Explanation's I. D => $120,600 Land = $180,000 y $134,000 $1341000 1166.606 Building :$180.000 y. $ 66,600 - => $59, noo $134,000 66000 2) Equipment = $48,000+ (PVF @ a 1, n=1) - $48.000 40.91th - $44.037. 15) Maintenance Equipment = $23,000 + & GOD = $ 23,900

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