Exercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $320

Question

Exercise 8-3 Lump-sum purchase of plant assets LO C1 Rodriguez Company pays $320,000 for real estate plus $16,960 in closing costs. The real estate consists of land appraised at $204,000; land improvements appraised at $51,000; and a building appraised at $255,000. Required: 1. Allocate the total cost among the three purchased assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below Required 1 Required 2 Alocate the total cos among the three purchased ases, Roung your fapportioned Cost" answers to 2 decimal places) Cost" answers to 2 decimal places. Percent of Total | x Total Cost of Apportioned Cost Value Acquisition Value Land Land improvements Building Totals Required 2> 1 of 1 Next

Explanation / Answer

Appraised % of App. Total cost of Apportioned Value Value Acquisition Cost Land 204000 40.00% 336960 134,784 Lland Improvement 51000 10.00% 336960 33,696 Building 255000 50.00% 336960 168,480 Total 510000 100.00% 336960 336,960 Journal entry: Land Account Dr. 134784 land Improvement Account Dr. 33696 Building Account Dr. 168480       Cash account 336960

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