Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.
Required: 1-a. Allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Topic Video
Question
Transcribed Image Text:Required LA Required 18 Required 2
Prepare the journal entry to record the purchase.
Journal entry worksheet
Record the costs of lump-sum purchase.
Noter des before credits.
January 01
Required 2
Recorded
General Journal
<Required SA
Dek Crediz
Complete this question by entering your answers in the tabs below.
Depreciations on and improvemera
Required 185
Required 2 >
Required LA Required S2 Required 2 Required 3
Compute the first year depreciation expense on the building using the straight-line method, assuming a 15-year life and a
$31.000 selvage value. (Round your answer to the nearest whole dollen)
Depreciation experson building
Complete this question by entering your answers in the tabe below.
Required 3 >
>
Required LA Required
2 Requind 3
Compute the first year depreciation expense on the land improvements auming a five-year life and double-declining-balance
![[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 $840,000. The
estimated market values of the purchased assets are building, $432,400; land, $282,000; land improvements, $37,600;
and four vehicles, $188,000.
Required:
1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000
salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Complete this question by entering your answers in the tabs below.
Required 1A Required 18 Required 2 Required 3
Allocate the lump-sum purchase price to the separate assets purchased.
Allocation of total
cost
Building
Land
Land improvements
Vehicles
Total
Estimated
Market Value
Percent of Total
%6
%6
%6
%6
X
x
< Required 1A
Total cost of
Acquisition
Apportioned
Cost
Required 1B >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff4abaa65-5ff5-4bfe-8429-c23b3ebfca82%2Ff7016850-5107-4516-a0c9-c7f32872f582%2Fqm6eb9_processed.png&w=3840&q=75)
Transcribed Image Text:[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 $840,000. The
estimated market values of the purchased assets are building, $432,400; land, $282,000; land improvements, $37,600;
and four vehicles, $188,000.
Required:
1-a. Allocate the lump-sum purchase price to the separate assets purchased.
1-b. Prepare the journal entry to record the purchase.
2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000
salvage value.
3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance
depreciation.
Complete this question by entering your answers in the tabs below.
Required 1A Required 18 Required 2 Required 3
Allocate the lump-sum purchase price to the separate assets purchased.
Allocation of total
cost
Building
Land
Land improvements
Vehicles
Total
Estimated
Market Value
Percent of Total
%6
%6
%6
%6
X
x
< Required 1A
Total cost of
Acquisition
Apportioned
Cost
Required 1B >
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 3 steps with 2 images
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