**Educational Content on Asset Allocation and Depreciation****Required Information:**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 as follows:- Building: $496,800- Land: $248,400- Land Improvements: $27,600- Four Vehicles: $147,200**Tasks Required:**1. **Allocate the Lump-Sum Purchase Price:** - Assign the total purchase price to the individual assets based on their market values.2. **Journal Entry Preparation:** - Document the purchase transaction in the financial records.3. **Depreciation Calculation for the Building:** - Utilize the straight-line depreciation method with a 15-year life span and a $30,000 salvage value to calculate the first-year depreciation expense for the building.4. **Depreciation Calculation for Land Improvements:** - Employ the double-declining-balance depreciation method over a five-year life span to compute the first-year depreciation expense for the land improvements.**Tabulated Data:**The table provided for Task 1a assists in allocating the lump-sum purchase price among the different assets:| **Allocation of Total Cost** | **Estimated Market Value** | **Percent of Total** | | **Total Cost of Acquisition** | **Apportioned Cost** ||------------------------------|----------------------------|----------------------|---|------------------------------|----------------------|| **Building** | $496,800 | % | x | | || **Land** | $248,400 | % | x | | || **Land Improvements** | $27,600 | % | x | | || **Vehicles** | $147,200 | % | x | | |This information outlines the systematic approach to handling acquisition costs and depreciation in accounting, providing clarity and ensuring accuracy in financial reporting. ```markdown### 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 as follows:- Building: $496,800- Land: $248,400- Land Improvements: $27,600- Four Vehicles: $147,200**Question 4: Comparison of Depreciation Methods**Compared to straight-line depreciation, does accelerated depreciation result in the payment of less total taxes over the asset’s life?- **Query:** Is tax payment less under accelerated depreciation? [Input Box]```

Name: **Educational Content on Asset Allocation and Depreciation****Require
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Description: **Educational Content on Asset Allocation and Depreciation****Required Information:**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 asset

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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

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

Section: Chapter Questions

Problem 1Q

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