9.7 (LO 1, 3,6 ) (Correction of Improper Cost Entries) Plant acquisitions for selected companies are as follows

E9.7 6) (Cor ction of Improper Cost Entries) Plant acquisitions for selected companies are as follows. I. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torres's assets had the following book and appraisal values. Land Buildings Equipment Book Values $200,000 250,000 300,000 Appraisal Values $150,000 350,000 300,000 To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made. Land Buildings Equipment Cash 150,000 250,000 300,000 700,000