Question
A company purchases property that includes land, buildings and equipment for $5.1 million. The company pays $189,000 in legal fees, $220,000 in commissions, and $119,000
A company purchases property that includes land, buildings and equipment for $5.1 million. The company pays $189,000 in legal fees, $220,000 in commissions, and $119,000 in appraisal fees. The land is estimated at 25%, the buildings are at 43%, and the equipment at 32% 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.) |
c. | Prepare the journal entry to record the purchase assuming that the company paid 50% 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 Journal Entry Required" in the first account field. Enter your answers in whole dollars and not in millions.) |
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