Plant acquisitions for selected companies are as follows. 1. Bramble Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $756,000. At the time of purchase, Torres’s assets had the following book and appraisal values. Book Values Appraisal Values Land $216,000 $162,000 Buildings 270,000 378,000 Equipment 324,000 324,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land 162,000 Buildings 270,000 Equipment 324,000 Cash 756,000 2. Sunland Enterprises purchased store equipment by making a $2,160 cash down payment and signing a 1-year, $24,840, 10% note payable. The purchase was recorded as follows. Equipment 29,484 Cash 2,160 Notes Payable 24,840 Interest Payable 2,484 3. Coronado Company purchased office equipment for $19,700, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was: Equipment 19,700 Cash 19,306 Purchase Discounts 394 4. Whispering Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $29,160. The company made no entry to record the land because it had no cost basis. 5. Metlock Company built a warehouse for $648,000. It could have purchased the building for $799,200. The controller made the following entry. Buildings 799,200 Cash 648,000 Profit on Construction 151,200 Prepare the entry that should have been made at the date of each acquisition. (Round intermediate calculations to 5 decimal palces, e.g. 0.56487 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Plant acquisitions for selected companies are as follows.
1. Bramble Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $756,000. At the time of purchase, Torres’s assets had the following book and appraisal values.
|
Book Values
|
Appraisal Values
|
|||||
|---|---|---|---|---|---|---|
|
Land
|
$216,000 | $162,000 | ||||
|
Buildings
|
270,000 | 378,000 | ||||
|
Equipment
|
324,000 | 324,000 |
To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.
| Land | 162,000 | |||
| Buildings | 270,000 | |||
| Equipment | 324,000 | |||
| Cash | 756,000 |
2. Sunland Enterprises purchased store equipment by making a $2,160 cash down payment and signing a 1-year, $24,840, 10% note payable. The purchase was recorded as follows.
| Equipment | 29,484 | |||
| Cash | 2,160 | |||
| Notes Payable | 24,840 | |||
| Interest Payable | 2,484 |
3. Coronado Company purchased office equipment for $19,700, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:
| Equipment | 19,700 | |||
| Cash | 19,306 | |||
| Purchase Discounts | 394 |
4. Whispering Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $29,160. The company made no entry to record the land because it had no cost basis.
5. Metlock Company built a warehouse for $648,000. It could have purchased the building for $799,200. The controller made the following entry.
| Buildings | 799,200 | |||
| Cash | 648,000 | |||
| Profit on Construction | 151,200 |
Prepare the entry that should have been made at the date of each acquisition. (Round intermediate calculations to 5 decimal palces, e.g. 0.56487 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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