Timberly Construction negotiates a lump-sum purchase of several assets from a co

Question

Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2017, at a total cash price of $810,000 for a building, land, land Improvements, and four vehicles. The estimated market values of the assets are bullding. $492.150; land, $260,550; land Improvements, $67,550; and four vehicles, $144,750. The company's fiscal year ends on December 31. Required 1.a. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the Journal entry to record the purchase. 2. Compute the depreclation expense for year 2017 on the bullding using the stralght-line method, assuming a 15-year life and a $31,000 salvage value. 3. Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining-balance depreclation. Complete this question by entering your answers in the tabs below Required 1A Required 1B | Required 2 Required 3 Compute the depreciation expense for year 2017 on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value. (Round your answers to the nearest whole dollar.) Depreciation expense on building

Explanation / Answer

Building value = 810000*492150/965000 = 413100

Depreciation expenses for year 2017 = (413100-31000)/15 = 25473

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