Chapter 8 Exercises

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Exercise 8-3 Lump-sum purchase of plant assets LO C1

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Liltua Company pays $335,000 for real estate plus $17,755 in closing costs. The real estate consists of land appraised at $202,400; land improvements appraised at $55,200; and a building appraised at $202,400.

3.

Allocate the total cost among the three purchased assets.

4.

Prepare the journal entry to record the purchase.