Question

how would you find the percentages?

- Chapter 10 Homework Frequired x C Timberly Construction Negotiate X + -ox newconnect.mheducation.com/flow/connect.html Chapter 10 Homework Required 0 Seved Help Save & Exit Submit Check my work 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. $502,200; land, $297,600; land improvements, $37,200 and four vehicles, $93,000. Part 1 of 2 Required: 333 points 1-a. Allocate the lump-sur 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 $29,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining balance depreciation. eBook References Complete this question by entering your answers in the tabs below. Required 1A Required 13 Required 2 Required 3 Allocale lhe lump-sum purchase price lo lhe separate assels purchased. Allocation of total cont Appraised Value Percent of Total Appraised Value Total cost of Acquisition Apportioned Cost - $ Building Land Land improvements Vehicles 502 2001 297 6001 37,2001 93,000 930,000 % % x x x x $ 330,000 $830,000 $ 530 000 $ 830,000 Total < Prey 102 or 15 Next > Type here to search A 4% 11/22/2019 22

Answer 1

1-a The allocation is done on the following basis:

Allocation of Total Cost	Appraised Value	Percent of Total Appraised Value	Total Cost of Acquisition	Apportioned Cost
Building	502200	54.00%	830000	448200
Land	297600	32.00%	830000	265600
Land Improvements	37200	4.00%	830000	33200
Vehicles	93000	10.00%	830000	83000
Total	930000	100.00%		830000

1-b Journal entry for acquisition will be:

Date	Account Description	Debit ($)	Credit ($)
Jan-01	Building	448200
	Land	265600
	Land Improvements	33200
	Vehicles	83000
	Cash		830000

2. Depreciation on building = (448200-29000)/15 = $27946.67

3. Depreciation on Land Improvements = $13280 (33200*2*20%)

Notes

Cost 378 Allocation of Total Cost 379 Building 380 Land 381 Land Improvements 382 Vehicles 383 Total Appraised Value 502200 297600 37200 93000 =SUM(B379:B382) Percent of Total Appraised Value =B379/$B$383 =B380/$B$383 =B381/$B$383 =B382/$B$383 =B383/$B$383 Total Cost of Acquisition 830000 830000 830000 830000 Apportioned Cost =C379 D379 =C380 D380 =C381D381 =C382-0382 -SUM(E379:E382)

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