Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of $280,000 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.
Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of $280,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of
$124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of
$280,000 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.
Transcribed Image Text:Lexington Garden Supply pays $280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of
$124,000, the building's current market value is $31,000, and the equipment's current market value is $155,000. Prepare a schedule allocating the purchase price of
$280,000 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 $280,000 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 $280,000.
Market
Percentage
(Sales)
of Total
Cost of
Asset
Value
Market Value
Each Asset
Land
%
Building
%
Equipment
100
Total
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