Question

Exercise 8-3 Lump-sum purchase of plant assets LO C1

Rodriguez Company pays $405,405 for real estate with land, land improvements, and a building. Land is appraised at $192,000; land improvements are appraised at $72,000; and a building is appraised at $216,000.

Required:
1. Allocate the total cost among the three assets.
2. Prepare the journal entry to record the purchase.

Exercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $405,405 for real estate with land, land improvements, and a building. Land is appraised at $192,000; land improvements are appraised at $72,000; and a building is appraised at $216,000. Required: 1. Allocate the total cost among the three 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 assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Appraised Value Percent of Total Appraised "x Total Cost of Value Acquisition = Apportioned Cost Land Land improvements Building Totals Required 1 Required 2 >

Problem 8-6A Part 3

• Record the sale of the used machine for $92,000 cash.
• Record the insurance settlement received of $33,500 resulting from the total destruction of the machine in a fire.

Answer 1

1a) Allocation

	Appraised value	Total cost of appraised value	* Total cost of acquisition	Apportioned value
Land	192000	40%	405405	162162
Land improvement	72000	15%	405405	60810.75
Building	216000	45%	405405	182432.25
Total	480000	100%		405405

1b) Journal entry

Date	account and explanation	Debit	Credit
	Land	162162
	Land improvement	60810.75
	Building	182432.25
	Cash		405405
	(To record purchase)

Note: Please post each question individually as HOMEWORKLIB guidelines