her jobs employment y B Exam #3-Ch 1-10 New Tab C O ezto.mheducation.com/hm.tpx

Question

her jobs employment y B Exam #3-Ch 1-10 New Tab C O ezto.mheducation.com/hm.tpx A company purchases property that includes land, buildings and equipment for $4.7 milion. The company pays $176,000 in legal fees, $215,000 in commissions, and $106,000 in appraisal fees. The land is estimated at 23%, the buildings are at 39%, and the equipment at 38% of the property value Required: a. Determine the total acquisition cost of this 'basket purchase." (Enter your answer in whole dollars and not in millions.) cquisition cost b. Allocate the total acquisition cost to the individual assets acquired. (Enter your answers in whole dollars and not in millions.) Land Buildings Equipment Prepare the journal entry to record thepurchase assuming that the company paid 45% of the amounts using cash and signed a note (due in five years) for the remainder. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in whole dollars and not in millions.) View transaction list Journal entry worksheet e Entry Level Financial Exam #3-CM-10-G.. w O iDownloads

Explanation / Answer

a Total acquisition cost Acquisition cost = 4,700,000+176,000+215,000+106,000 = $5,197,000 b Allocation of total acquisition cost Land = $5,197,000*23% = $1,195,310 Buildings = $5,197,000*39% = $2,026,830 Equipments = $5,197,000*38% = $1,974,860 c Journal Entry Transaction General Journal Debit Credit 1 Land          11,95,310 Buildings          20,26,830 Equipments          19,74,860 Cash ($5,197,000*45%)          23,38,650 Note Payable ($5,197,000*55%)          28,58,350

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