Question

Sneathen Company purchased a restaurant building, land, and equipment for $690,000 cash. The appraised value of the assets was as follows: Land Building Equipment $ 75,900 265,650 417,450 Total $759,000 Required a. Compute the amount to be recorded on the books for each of the assets. (Round "Percent of appraised value" and final answer to the nearest whole numbe Allocated Cost Land Building Equipment Total $ b. Record the purchase in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). The letters NA indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign. Round "Percent of appraised value" and final answer to the nearest whole number.) SNEATHEN COMPANY Horizontal Statements Model Balance Sheet Income Statement Assets -- Liabilities - Equity Revenue - Expense - Land + Building + Equipment Net Income Statement of Cash Flow Cash +

Answer 1

Answer

• Requirement [a]

	Allocated Cost
Land	$                                        69,000.00
Building	$                                      241,500.00
Equipment	$                                      379,500.00
Total	$                                      690,000.00

--Working

Allocation of Total Cost	Appriased Value	% of total appraised value	Total cost of acquisition	Apportioned Cost
Land	$                             75,900.00	10.0%	$                   690,000.00	$                                        69,000.00
Building	$                           265,650.00	35.0%	$                   690,000.00	$                                      241,500.00
Equipment	$                           417,450.00	55.0%	$                   690,000.00	$                                      379,500.00
Total	$                           759,000.00	100%		$                                      690,000.00

• Requirement [b]

Cash	Land	Building	Equipment	Liabilities	Equity	Revenues	Expenses	Net Income	Statement of Cash Flows
($690,000)	$69,000	$241,500	$379,500	$0	$0	$0	$0	$0	($690,000)	Financing Activity (FA)