-) ? Oezto.mheducation.com/hm.tpx A company purchases property that includes lan

Question

-) ? Oezto.mheducation.com/hm.tpx A company purchases property that includes land, buildings and equipment for $5.0 million. The company pays $188,000 in legal fees, $226,000 in commissions, and $117,000 in appraisal fees. The land is estimated at 22%. the buildings are at 43%, and the equipment at 35% 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.) 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 the purchase assuming that the company paid 35% 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 Journel Entry Required" in the first account field. Enter your answers in whole dollars and not in millions.) View transaction list O Type here to search

Explanation / Answer

1. Total acquisition cost = $5531000

Legal expenses,appraisal & commission fees would be capitalised

2. Land - $1216820

Building- 2378330

Equipment - $1935850

3.Land 1216820

Building 2378330

Equipment 1935850

Cash 1935850

Credit note 3595150

(being assets recorded & note for 5 yrs isssued)

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