1.

value: 10.00 points

Xavier 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, 2015, at a total cash price of $840,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $482,500; land, $318,450; land improvements, $67,550; and four vehicles, $96,500. The companys financial year ends on December 31.

Required:
1a.	Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. (Round your percentage answers to the nearest whole number. Omit the "$" and "%" signs in your response.)

	Appraised Value		Percent of Total		Apportioned Cost
(Click to select)EquipmentRepairs expenseDepreciation expenseCashBuilding	$		%		$
(Click to select)Repairs expenseEquipmentDepreciation expenseLandCash
(Click to select)Repairs expenseDepreciation expenseEquipmentLand improvementsCash
(Click to select)VehiclesDepreciation expenseEquipmentCashRepairs expense
Totals	$		%		$

1b.	Prepare the journal entry to record the purchase. (Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 1, 2015	(Click to select)BuildingCashLand improvementsMachineryLandAccounts payableVehicles Equipment
	(Click to select)Accounts payableCashVehicles LandLand improvementsEquipmentBuildingMachinery
	(Click to select)CashLandLand improvementsVehicles BuildingMachineryAccounts payableEquipment
	(Click to select)BuildingEquipmentAccounts payableCashMachineryVehicles LandLand improvements
	(Click to select)VehiclesLand improvementsAccounts payableBuildingCashEquipmentLandMachinery

2.	Compute the depreciation expense for year 2015 on the building using the straight-line method, assuming a 15-year life and a $32,000 residual value. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)

Depreciation expense on building

$

3.	Compute the depreciation expense for year 2015 on the land improvements assuming a five-year life and double-declining-balance depreciation. (Omit the "$" sign in your response.)

Depreciation expense on land improvements

$

[The following information applies to the questions displayed below.]

In January 2015, Keona Co. pays $2,750,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $619,500, with a useful life of 20 years and an $90,000 residual value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $560,500 that are expected to last another 19 years with no residual value. Without the buildings and improvements, the tract of land is valued at $1,770,000. The company also incurs the following additional costs:

Cost to demolish Building 1	$	338,400
Cost of additional land grading		189,400
Cost to construct new building (Building 3), having a useful life of 25 years and a $400,000 residual value		2,242,000
Cost of new land improvements (Land Improvements 2) near Building 2 having a 20-year useful life and no residual value		173,000

2.

value: 10.00 points

Required information

Required:

1.	Allocate the costs incurred by Keona to the appropriate columns and total each column. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Land

Building 2

Building 3

Land improvements 1

Land improvements 2

Purchase price

$

$

$

$

$

Demolition

Land grading

New building

New improvements

Totals

$

$

$

$

$

3.

value: 10.00 points

Required information

2.	Prepare a single journal entry to record all the incurred costs assuming they are paid in cash on January 1, 2015. (Omit the "$" sign in your response.)

Date

General Journal

Debit

Credit

Jan. 1

(Click to select)Land improvements 2Land improvements 1Building 2LandCashBuilding 3 Accounts payableMachinery

(Click to select)LandBuilding 2CashAccounts payableLand improvements 1Land improvements 2Building 3 Machinery

(Click to select)Land improvements 1MachineryBuilding 3 LandLand improvements 2Accounts payableBuilding 2Cash

(Click to select)Land improvements 1MachineryBuilding 2Building 3 Accounts payableLand improvements 2CashLand

(Click to select)LandBuilding 2Accounts payableLand improvements 1CashLand improvements 2MachineryBuilding 3

(Click to select)Accounts payableBuilding 2Building 3MachineryLandLand improvements 1CashLand improvements 2

4.

value: 10.00 points

Required information

3.	Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2015 when these assets were in use. (Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Dec. 31	(Click to select)Depreciation expense-building 2Depreciation expense-machineryAccounts receivableAccumulated depreciation-building 2Office expenseAccounts payableCashLighting expense
	(Click to select)Accumulated depreciation-building 2Accounts payableDepreciation expense-machineryAccounts receivableDepreciation expense-building 2Office expenseCashLighting expense
	(Click to select)Accounts payableLighting expenseAccounts receivableAccumulated depreciation-building 3Depreciation expense-machineryDepreciation expense-building 3CashOffice expense
	(Click to select)Depreciation expense-building 3Accounts receivableDepreciation expense-machineryLighting expenseAccounts payableCashAccumulated depreciation-building 3Office expense
	(Click to select)Accum. depreciation-land improv. 1Accounts payableAccounts receivableCashOffice expenseDepreciation expense-land improv. 1Lighting expenseDepreciation expense-machinery
	(Click to select)Accounts receivableOffice expenseAccounts payableDepreciation expense-machineryAccum. depreciation-land improv. 1Lighting expenseCashDepreciation expense-land improv. 1
	(Click to select)CashAccumulated depreciation-land improv. 2Lighting expenseOffice expenseDepreciation expense-machineryAccounts receivableDepreciation expense-land improv. 2Accounts payable
	(Click to select)Depreciation expense-land improv. 2Depreciation expense-machineryAccum. depreciation-land improv. 2Accounts receivableAccounts payableOffice expenseCashLighting expense