Lany Co. owned three properties which are classified as investment properties. Details of theproperties are as follows:Property 1Property 2Property 3Initial Cost2,700,0003,450,0003,300,000Fair ValueDec. 31, 20223,200,0003,050,0003,850,000Fair ValueDec. 31, 20233,500,0002,850,0003,600,000Each property was acquired at the beginning of 2017 with a useful life of 25 years and noresidual value.Required:1. Assuming the company elects to use the cost model, compute the total book value of theinvestment properties as of December 31, 2023.2. Assuming the company elects to use the fair value model, compute the net gain (loss)due to changes in fair value during 2023.

The cost method of determining the book value of an asset indicates the purchase cost of asset(s)…

Answered: Lany Co. owned three properties which…

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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Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $983,000 cash The land was appraised at $248 699 and the building at $881,751 Required: What is the accounting term for this type of acquisition? b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model.
Advanced Automotive pays $270,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $30,000, the building's current market value is $210,000, and the equipment's current market value is $60,000. Prepare a schedule allocating the purchase price of $270,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price. Prepare a schedule allocating the purchase price of $270,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price. Begin by preparing a schedule allocating the purchase price of $270,000. (Do not enter the % sign within the input fields of the Percentage of Total Market column.) Asset Land Building Equipment Total Market…
On 13 February 20X5, Reekwa Company purchased an office tower for $31.1 million. The office is a mixed-use property: it is owner- occupied and includes rental units. The fair value of the building on 31 December 20X6 is $31.5 million and $28.0 million on 31 December 20X8. At the time of purchase, the office tower has a remaining useful life of 25 years, and is amortized on a straight-line basis. Required: 1. Should the office tower be considered property, plant, and equipment or investment property? Property, plant, and equipment Investment property 2. Assume the property is determined to be PPE, and management applies the elimination method for the revaluation model. Prepare the required journal entries for the revaluation of the office tower in 20X6 and 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 31 December 20X6 No journal entry required 2 31 December 20X8 Accounts payable General Journal Debit × ×…
Anderson Corporation has purchased a group of assets for $23,200. The assets and their relative fair value are listed below Land Equipment Building $7,300 2,300 3,100 Which of the following amounts would be debited to the Land account? Round any intermediate calculations to two (2) decimal places, and the final answer to the nearest dollar OA $4.233 OB. $4,176 OC. $5.568 OD. $13,224
Foley Distribution Service pays $330,000 for a group purchase of land, bulding, and equipment At the time of acquisition, the land has a current market value of $36,000, the building's current market valu $36, 000, and the equipment's current market value is $ 283,000. Prepare a schedule allocating the purchase price of 5330.000 to each of the individual assets purchased based on their relative market val journalize the lump - sum purchase of the three assets. The business signs a note payable for the purchase price
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,995,000. Harding paid $560,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $592,000; Building, $1,760,000 and Equipment, $1,168,000. What value will be reported for the land on the balance sheet? Note: Round intermediate percentage values to a whole percentage. Multiple Choice O O 00 $598,400 $339,150 $1,760,000 $1,161,600
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $ 811,000 cash. The land was appraised at $223, 836 and the building at $708,814. Required a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. b. Would the company recognize a gain on the purchase? c. Record the purchase in a horizontal statements model. d . Record the purchase in general journal format.
Kingbird Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $447,300. The estimated fair values of the assets are land $85,200, building $312,400, and equipment $113,600. At what amounts should each of the three assets be recorded? (Do not round intermediate calculations and round final answers to O decimal places e.g. 58,971.) Land Building LA LA Equipment $ Save for Later Recorded Amount eTextbook and Media DAE O Search LDLC 8 F8 DOLL Attempts: 0 of 3 used prt sc home Submit Answer end insert
Whispering Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $396,900. The estimated fair values of the assets are land $75,600, building $277,200, and equipment $100,800. At what amounts should each of the three assets be recorded? (Round intermediate percentage calculations to 5 decimal places e.g. 18.25124 and final answers to O decimal places, e.g. 5,275.) Land Building Recorded Amount $ LA Equipment $ LA
SEASH, Inc. acquired an office building, land, and equipment in a single basket purchase. The fair values were $2,400,000, $1,200,000, and $400,000 for the building, land, and equipment, respectively. The company recorded the building for $2,160,000. What was the total purchase cost for all three assets? Select one: a. $3,400,000 b. $3,600,000 c. $3,200,000 d. $3,800,000 e. $4,000,000

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