Question

Problems 0 Saved Help Required information [The following information applies to the questions displayed below.) Timberly Construction makes a lump sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $487,550, land, $288,550, land improvements, $59,700, and four vehicles, $159,200. equired: a. Allocate the lump-sum purchase price to the separate assets purchased. -b. Prepare the journal entry to record the purchase. - Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $28. alvage value. 3. Compute the first-year depreciation expense 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 Required 1B Required 2 Required 3 Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total Appraised Percent of Total Total cost of Apportioned Prex 12 of 3 !! Score answer >

Answer 1

a) Allocation

Allocation of cost	Appraised value	Percent of appraised value	Total cost of acquisition	Apportioned cost
Building	487550	49%	830000	406700
land	288550	29%	830000	240700
Land improvements	59700	6%	830000	49800
Vehicles	159200	16%	830000	132800
Total	995000	100%		830000

b) Journal entry

Date	account and explanation	Debit	Credit
	Building	406700
	Land	240700
	Land improvement	49800
	Vehicle	132800
	Cash		830000

c) For building depreciation salvage value is not visible

d) Vehicle depreciation = 132800*40% = 53120