Chapter 7, Problem 7.2S

LO 1

(Learning Objective 1: Measure and record the cost of individual assets in a lump-sum purchase of assets) 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.