1. Original Banners pays $220,000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $34,500, the building $184,000, and the equipment $11,500. Journalize the lump-sum purchase. First, refer to the information provided and calculate the ratio of each asset's market value to the total for all assets combined. Then, complete the table and calculate the assigned cost for each asset. Total Purchase Price Assigned Cost of Each Asset Percentage Market Value of Total Value Asset Land Building Equipment Total Now, journalize the lump-sum purchase. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Debit Credit Date % % % % x x x =
1. Original Banners pays $220,000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $34,500, the building $184,000, and the equipment $11,500. Journalize the lump-sum purchase. First, refer to the information provided and calculate the ratio of each asset's market value to the total for all assets combined. Then, complete the table and calculate the assigned cost for each asset. Total Purchase Price Assigned Cost of Each Asset Percentage Market Value of Total Value Asset Land Building Equipment Total Now, journalize the lump-sum purchase. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Accounts and Explanation Debit Credit Date % % % % x x x =
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution and formulae in image format..thanku
Transcribed Image Text:1. Original Banners pays $220,000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $34,500, the building $184,000, and the equipment $11,500. Journalize the lump-sum purchase.
First, refer to the information provided and calculate the ratio of each asset's market value to the total for all assets combined. Then, complete the table and calculate the assigned cost for each asset.
Total
Purchase
Price
Assigned
Cost of Each
Asset
Asset
Land
Building
Equipment
Percentage
Market Value of Total Value
%
%
%
%
X
X
X
=
=
=
Total
Now, journalize the lump-sum purchase. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts and Explanation
Debit
Credit
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education