Question

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. Required: 1-o. Allocate the lump-sum purchase price to the separate assets purchased 1-b. Prepare the journal entry to record the purchase 2. Compute the first year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $28,000 salvage 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 IA Required 1B Required 2 Required 3 Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a SR On avaneval Rund answer to the name whole dollar Prox 1 2 of 3 Iii Score answer >

Answer 1

1a
Allocation of total cost	Appraised Value	Percent of Total Appraised Value	x	Total cost of Acquisition	Apportioned Cost
Building	487,550	49%	x	830,000	406,700
Land	288,550	29%	x	830,000	240,700
Land improvements	59,700	6%	x	830,000	49,800
Vehicles	159,200	16%	x	830,000	132,800
Total	995,000	100%			830,000
b
Date	General Journal	Debit	Credit
1-Jan	Building	406,700
	Land	240,700
	Land improvements	49,800
	Vehicles	132,800
	Cash		830,000
2
Depreciation expense on building	25247	=(406700-28000)/15
3
Depreciation rate	40%	=1/5*2
Depreciation expense on land improvements	19920	=49800*40%