Diaz Inc. purchased a building and the land on which the building is situated for a total

Question:

Diaz Inc. purchased a building and the land on which the building is situated for a total cost of $\$ 800,000$ cash. The land was appraised at $\$ 270,000$ and the building at $\$ 630,000$.
Required

a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.

b. Would the company recognize a gain on the purchase? Why or why not?

c. Record the purchase in a statements model like the following one.

image text in transcribed

d. Record the purchase in general journal format.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamental Financial Accounting Concepts

ISBN: 12

7th Edition

Authors: Thomas Edmonds

See More Books

Question Posted: May 16, 2024 09:00 AM

See More Questions

The accounts below appear in the ledger of Windsor Company. Retained Earnings Dr. Cr. Bal. Jan. 1, 2025 Aug. 15 Credit balance $42,300 Dividends (cash) $15,000 27,300 Dec. 31 Net income for 2025...
Estrada Inc. purchased a building and the land on which the building is situated for a total cost of $600,000 cash. The land was appraised at $210,000 and the building at $490,000. Required a....
Carver Inc. purchased a building and the land on which the building is situated for a total cost of $700,000 cash. The land was appraised at $320,000 and the building at $480,000. Required a....
Let B > 0. Show that the maximum of (x 1 , . . . , x n ) = x 1 + + x n subject to x 2 1 + + x 2 n = B 2 is nB. Conclude that for all numbers a,..., an lal++lanl n(a + + a) / 1/2
A ruby laser produces radiation of wavelength 633 nm in pulses whose duration is 1.00 10-9 s. (a) If the laser produces 0.376 J of energy per pulse, how many photons are produced in each pulse? (b)...
(a) Verify explicitly the invariance of the volume element $d \omega$ of the phase space of a single particle under transformation from the Cartesian coordinates \(\left(x, y, z, p_{x}, p_{y},...
What are the three principal forms of business organization? WTiat are the advantages and disadvantages of each? AppendixLO1
Kumar Company has two producing departments and two support centers. The following budgeted data pertain to these four departments: Required: 1. Allocate the overhead costs of the support departments...
Business Law II - Chapter 35 Forms of Business Organization Name Date Fill in cach blank with the exact legal term. 1. A business organization in which the owner has total control and unlimited...
Ram Manufacturing Company started operations by acquiring $\$ 120,000$ cash from the issue of common stock. On January 1, 2011, the company purchased equipment that cost $\$ 120,000$ cash, had an...
Una Corp. was started in 2011. The following summarizes transactions that occurred during 2011 : 1. Issued a $\$ 20,000$ face value discount note to Golden Savings Bank on April 1, 2011. The note...
Econo-Tire is planning an advertising campaign for its newest product, an inexpensive radial. Preliminary road tests conducted by the firm's quality-control department have suggested that the...
Assume the following information (figures are in thousands): a. Calculate the monthly budget and monthly cumulative budgets for the project. b. Draw a project S-curve representation of this project....
Assume that you are a project manager in a software firm and have been asked to calculate the expected cost for a new fast-food epos system. Referring to historical information, you know that the...
Dormant eggs of the zooplankton Daphnia survive in lake sediments for decades, making it possible to measure their physiological traits in past years. Hairston et al. (1999) extracted Daphnia eggs...
For each of the following events, determine the amount of freight paid by The Book Shop. Also indicate whether the freight cost would be classified as a product or period (selling and administrative)...
The following account titles and balances were taken from the adjusted trial balance of Scoggins Sales Co. at December 31, 2011. The company uses the periodic inventory method. Required a. Prepare a...
On December 31, 2013, Fern Company adopted the dollar-value LIFO inventory method. All of Ferns inventories constitute a single pool. The inventory on December 31, 2013, using the dollar-value LIFO...
What exactly is a prima facie duty? How does an ethic of prima facie duties differ from monistic and absolutist ethical theories?
Steelers Football, Inc. (SFI) needs to prepare a bank reconciliation for September. The information from SFIs bank statement and cash account is summarized below. Bank Statement Cash Account Records...
Product A Product B Monthly sales in dollars $ 120,000 $ 100,000 Contribution margin ratio 20% 64% If the fixed cost is $50,000. Required: A. Compute the overall break-even point for the company in...
4. Show the operating break even point if a company has fixed costs of $200, a sales price of $15, and variables costs of $10. (2 points) F = $200 Quantity Revenues Fixed Costs Total Costs P = $15 0...

Diaz Inc. purchased a building and the land on which the building is situated for a total

Question:

Assets Cash + Land + Building == Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Step by Step Answer:

AbsolutelyI can help you with this a Allocation of Purchase Cost The total purchase cost is 800000 T...View the full answer

Fundamental Financial Accounting Concepts

Students also viewed these Business questions