Timberly Construction makes a lump - sum purchase of several assets on January 1 at a tota cash price of $810,000. The estimated market values of the purchased assets are building, 487,600; land, $285, 200; land improvements, $73,600; and four vehicles, $73,600. Allocate the lump - sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. 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. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining - balance depreciation.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 building, $
487,600; land, $285,200; land improvements, $73,600; and four vehicles, $73,600. Allocate
the lump - sum purchase price to the separate assets purchased. Prepare the journal entry to
record the purchase. 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. Compute the
first-year depreciation expense on the land improvements assuming a five-year life and
double - declining - balance depreciation.
Transcribed Image Text: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 building, $ 487,600; land, $285,200; land improvements, $73,600; and four vehicles, $73,600. Allocate the lump - sum purchase price to the separate assets purchased. Prepare the journal entry to record the purchase. 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. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double - declining - balance depreciation.
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