formation ing information applies to the questions displayed below.] onstruction makes a lump-sum purchase of several assets on January 1 at a total c harket values of the purchased assets are building, $496,800; land, $248,400; lar hicles, $147,200. ump-sum purchase price to the separate assets purchased. ournal entry to record the purchase. rst-year depreciation expense on the building using the straight-line method, assu

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[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 $810,000. The
estimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600;
and four vehicles, $147,200.
Required:
1-a. 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-yea depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000
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 1A
Required 1B
Allocate the lump-sum purchase price to the separate assets purchased.
Allocation of total
cost
Building
Land
Required 2 Required 3
Land improvements
Estimated
Market Value
$ 496,800
248,400
27,600
Percent of Total
X
% X
% X
%
Total cost of
Acquisition
Apportioned
Cost
Transcribed Image Text: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 $810,000. The estimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600; and four vehicles, $147,200. Required: 1-a. 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-yea depreciation expense on the building using the straight-line method, assuming a 15-year life and a $30,000 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 1A Required 1B Allocate the lump-sum purchase price to the separate assets purchased. Allocation of total cost Building Land Required 2 Required 3 Land improvements Estimated Market Value $ 496,800 248,400 27,600 Percent of Total X % X % X % Total cost of Acquisition Apportioned Cost
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 $810,000. The
estimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600;
and four vehicles, $147,200.
4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life?
Is tax payment less under accelerated depreciation?
Transcribed Image Text: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 $810,000. The estimated market values of the purchased assets are building, $496,800; land, $248,400; land improvements, $27,600; and four vehicles, $147,200. 4. Compared to straight-line depreciation, does accelerated depreciation result in payment of less total taxes over the asset's life? Is tax payment less under accelerated depreciation?
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