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, $484, 500; land, $304,000; land improvements, $66, 500; and four vehicles, $95,000. 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 $30,000 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 $840,000. The estimated market values of the purchased assets are building, $484, 500; land, $304,000; land improvements, $66, 500; and four vehicles, $95,000. 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 $30,000 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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