Craig purchased a facility that includes land, a building, machinery and equipment and some inventory supplies for a total cost of $ 375,000 on March 30, 2027. He obtained a 2 year note from the bank for the purchase. The previous owner decided to sell his facility at a reduced price as reflected in the fair values of the individual assets Craig acquired. You know to record this as a lump sum purchase (or basket purchase).

Fair Market Value of Assets in Purchase:

Land                                  $127,500

Building                            $191,250

Backhoe                             $53,125

Trailer                                 $21,250

Inventory Supplies          $31,875

1. Determine the acquisition cost of each asset purchased in this lump-sum purchase (also referred to as a basket purchase). You will create a separate asset account for each of the assets listed above. Add new accounts as needed. Create a new account for the Inventory Supplies (do not use Inventory Asset). Journalize this purchase in the QB Online Test Drive Company.
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3. On April 10th, 2027 Craig decided to sell all the inventory supplies to a local company for $36,000. You will record the gain or loss for this transaction. Craig will use this entire amount to pay down the note. Record two separate journal transactions.
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5. Craig also decides he will not need the backhoe. He sold the backhoe for $45,000 to another local company on April 25, 2027. No need to record any depreciation as it was not “used” in the business. You will record the gain or loss for this transaction. Craig will also use this entire amount to pay down the note. Record this as two separate transactions.