Req a: | |||||
Total Acquisition cost: | |||||
Purchase price | 5200000 | ||||
Add: Legal Fees | 179000 | ||||
Add: Commissions | 228000 | ||||
Add: Appraisal fees | 103000 | ||||
Total Acquisition cost: | 5,710,000 | ||||
Req b: | |||||
Allocation of Allocation cost: | |||||
Land: (5710000*25%) | 1427500 | ||||
Building (5710000*40%) | 2284000 | ||||
Equipment (5710000*35%) | 1998500 | ||||
Req c: | |||||
Land Account Dr. | 1427500 | ||||
Building Account Dr. | 2284000 | ||||
Equipment Account Dr. | 1998500 | ||||
Cash account | 2569500 | ||||
Notes payable Account | 3140500 |
A company purchases property that includes land, buildings and equipment for $5.2 million. The company pays...
Greer Manufacturing purchases property that includes land, buildings and equipment for $4.5 million. The company pays $179,000 in legal fees, $225,000 in commissions, and $108,000 in appraisal fees. The land is estimated at 22%, the buildings are at 41%, and the equipment at 37% of the property value. Greer Manufacturing purchases property that includes land, buildings and equipment for $4.5 million. The company pays $179,000 in legal fees, $225,000 in commissions, and $108,000 in appraisal fees. The land is estimated...
Greer Manufacturing purchases property that includes land, buildings and equipment for $52 million. The company pays $172,000 in legal fees. $224,000 in commissions, and $109,000 in appraisal fees. The land is estimated at 28%, the buildings are at 44%, and the equipment at 28% of the property value. Required: a. Determine the total acquisition cost of this "basket purchase" b. Allocate the total acquisition cost to the individual assets acquired. c. Prepare the journal entry to record the purchase assuming...
Greer Manufacturing purchases property that includes land, buildings and equipment for $4.6 million. The company pays $173,000 in legal fees, $211,000 in commissions, and $108,000 in appraisal fees. The land is estimated at 28%, the buildings are at 40%, and the equipment at 32% of the property value. Required: 1. Determine the total acquisition cost of this "basket purchase". 2. Allocate the total acquisition cost to the individual assets acquired. 3. Prepare the journal entry to record the purchase assuming...
Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000; buildings, $125,000; and equipment, $25,000. Required: 1. What cost should the company assign to the land, buildings, and equipment, respectively? 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land,...
Garrett Corporation paid $200,000 to acquire land, buildings, and equipment. At the time of acquisition, Garrett paid $20,000 for an appraisal, which revealed the following values: land, $100,000; buildings, $125,000; and equipment, $25,000. Required: 1. What cost should the company assign to the land, buildings, and equipment, respectively? 2. Assume that Garrett uses IFRS and chooses to use the revaluation model to value its property, plant, and equipment. At the end of the year, the book value of the land,...
1. Whispering Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $868,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land $248,000 $186,000 Buildings 310,000 434,000 Equipment 372,000 372,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 186,000 Buildings 310,000 Equipment 372,000 Cash 868,000 2....
Samtech Manufacturing purchased land and building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance $ 31,000 Legal fees for drawing the contract 7,500 Pro-rated property taxes for the period after acquisition 51,000 State transfer fees 5,500 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.5 and $1.5 million, respectively. Shortly after acquisition, Samtech spent...
1. Marigold Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $770,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land $220,000 $165,000 Buildings 275,000 385,000 Equipment 330,000 330,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 165,000 Buildings 275,000 Equipment 330,000 Cash 770,000 2....
E10.6 (LO 1, 3) are as follows 1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torres's assets had the following book and appraisal values. (Correction of Improper Cost Entries) Plant acquisitions for selected companies Book Values Appraisal Values less Land $200,000 $150,000 350,000 Buildings Equipment 250,000 300,000 300,000 To be conservative, the company decided to take the lower of the two values...
Check my work Samtech Manufacturing purchased land and building for $5 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $28,000 6,000 48,000 5,200 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3.6 and $2.4 million, respectively. Shortly after acquisition,...