Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 9, Problem 9.18E
Making a lump-sum purchase of assets
Dearwood Properties bought three lots in a subdivision for a lump-sum price. An independent appraiser valued the lots as follows:
| Lot | Appraised Value |
| 1 | $ 45,000 |
| 2 | 292,500 |
| 3 | 112,500 |
Dearwood paid $435,000 in cash. Record the purchase in the journal, identifying each lot’s cost in a separate Land account. Round decimals to two places, and use the computed percentages throughout.
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Making a lump-sum purchase of assets
Maplewood Properties bought three lots in a subdivision for a lump-sum price. An independent appraiser valued the lots as follows:
Maplewood paid $355,000 in cash. Record the purchase in the journal, identifying each lot’s cost in a separate Land account. Round decimals to two places, and use the computed percentages throughout.
Am. 398.
Following are descriptions of land purchases in four separate cases.
Requireda. Determine the cost used for recording the land acquired in each case.b. Record the journal entry for each case on the date of the land’s acquisition.
Note: Round your answers to the nearest whole dollar.
Case One
1. At the midpoint of the current year, a $32,000 check is given for land, and the buyer assumes the liability for unpaid taxes in arrears of $800 at the end of last year and those assessed for the current year of $720.
a. Determine the cost used for recording the land acquired.Cost of land $Answer
b. Record the journal entry on the date of the
Account NameDr.Cr.
Answer
Answer
Answer
To record land acquisition.
Chapter 9 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
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