### Timberly Construction Asset Purchase Analysis**Scenario Overview:**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 as follows:- Building: $467,950- Land: $257,850- Land improvements: $47,750- Four vehicles: $181,450**Required Tasks:**1. **Allocate the Lump-Sum Purchase Price:** - Divide the total purchase cost among the separate assets based on their market values.2. **Journal Entry Preparation:** - Record the lump-sum purchase in a journal entry.3. **Depreciation Calculation (Straight-Line Method):** - Compute the first-year depreciation expense for the building, using a straight-line method, a useful life of 15 years, and a $3,000 salvage value.4. **Depreciation Calculation (Double-Declining-Balance Method):** - Calculate the first-year depreciation expense for the land improvements assuming a five-year life span.**Data Entry Table:**The table is used to allocate the total cost among the assets:| Asset | Estimated Market Value | Percent of Total | Total Cost of Acquisition | Apportioned Cost ||---------------------|------------------------|-----------------|----------------------------|------------------|| Building | | | | || Land | | | | || Land Improvements | | | | |### Instructions for Completion:Complete the allocation in the table and calculate the respective allocated costs based on the provided market values. Enter answers in the appropriate sections marked as Required 1A, 1B, 2, and 3.This exercise is designed to enhance understanding of asset allocation, journal entries, and depreciation methods in accounting.

The process of recording business transactions in the books of accounts for the first time is…

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, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. 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.

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, $467,950; land, $257,850; land improvements, $47,750; and four vehicles, $181,450. 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.

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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