Exercise $9-1$ Cost included in PPE LO$1.$ CHECK FIGURE: Total acquisition costs $=$ $$16,250$

Dalton Company purchased a machine for $$15,000,$ terms $2/10,$ n$/60,$ FOB shipping point. The seller prepaid the freight charges, $$260,$ and sent a second invoice for the freight. Dalton took advantage of the discount on the first invoice, but the discount was not available on the freight invoice. The machine required a special steel mounting and power connections costing $$795,$ and another $$375$ was paid to assemble the machine and get it into operation. In moving the machine onto its steel mounting, it was dropped and damaged. The repairs cost $$190.$ Also, $$120$ of raw materials were used in calibrating $($adjusting$)$ the machine so that it would produce the correct quality product. The adjustments were normal for this type of machine and were not the result of the damage. However, the items produced while the adjustments were being made were not saleable. Prepare a calculation to show the cost of this machine for accounting purposes.

Exercise $9-2$ Recording costs of real estate$$land versus building costs LO$1$

CHECK FIGURE: Dr Land $$1,860,000$

After planning to build a new plant, Kallisto Backpack Manufacturing purchased a large lot on which a small building was located. The negotiated purchase price for this real estate was $$1,200,000$ for the lot plus $$480,000$ for the building. The company paid $$75,000$ to have the old building torn down and $$105,000$ for levelling the lot. Finally, it paid $$2,880,000$ in construction costs, which included the cost of a new building plus $$215,000$ for lighting and paving a parking lot next to the building. Present a single journal entry to record the costs incurred by Kallisto, all of which were paid in cash $($assume a date of March $10,2017,$ for your entry$).$

Exercise $9-3$ Lump$-$sum purchase LO$1.$ CHECK FIGURE: Dr Land $$244,346$

On April $12,2017,$ Prism Ltd$.,$ a camera lens manufacturer, paid cash of $$552,375$ for real estate plus $$29,400$ cash in closing costs. The real estate included land appraised at $$249,480$; land improvements appraised at $$83,160$; and a building appraised at $$261,360.$ Prepare a calculation similar to QS $9-3$ showing the allocation of the total cost among the three purchased assets and present the journal entry to record the purchase.

Exercise $9-4$ Lump$-$sum purchase LO$1.$ CHECK FIGURE: Dr Tools $$388,800$

On January $1,2017,$ Bona Vista Co$.$ purchased land, a building, equipment, and tools for a total price of $$4,320,000,$ paying cash of $$1,104,000$ and borrowing the balance from the bank. The bank appraiser valued the assets as follows: $$1,152,000$ for the land; $$1,344,000$ for the building; $$998,400$ for the equipment; and $$345,600$ for the tools. Prepare the entry to record the purchase.