accounting 1 456109
Aug 29, 2021 | Uncategorized
|
Xavier Construction negotiates a lump sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2011, at a total cash price of $830,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $498,200; land, $253,800; land improvements, $75,200; and four vehicles, $112,800. The company’s fiscal year ends on December 31.
|
1a.
|
Prepare a table to allocate the lump sum purchase price to the separate assets purchased. (Round your percentage answers to the nearest whole number. Omit the “$” and “%” signs in your response.)
|
|
1b. Prepare the journal entry to record the purchase. (Omit the “$” sign in your response.)
2.
|
Compute the depreciation expense for year 2011 on the building using the straight line method, assuming a 15 year life and a $30,000 salvage value. (Round your answer to the nearest dollar amount. Omit the “$” sign in your response.)
|
3.
|
Compute the depreciation expense for year 2011 on the land improvements assuming a five year life and double declining balance depreciation. (Omit the “$” sign in your response.)
|
|
|
