Lump-Sum Purchase

To add to his growing chain of grocery stores, on January 1, 2014, Danny Marks bought a grocery store of a small competitor for $562,000. An appraiser, hired to assess the acquired assets' values, determined that the land, building, and equipment had market values of $208,560, $158,000, and $265,440, respectively.

Required:

1. What is the acquisition cost of each asset? Do not round intermediate calculations. If required, round your final answers to the nearest dollar.

Asset	Acquisition Cost
Land:	$
Building:	$
Equipment:	$

Identify and analyze the effect of the acquisition.

Activity	- Select your answer -OperatingInvestingFinancingCorrect 1 of Item 2
Accounts	- Select your answer -Land Increase, Building Increase, Equipment Increase, Cash IncreaseLand Increase, Building Increase, Equipment Increase, Cash DecreaseLand Decrease, Building Increase, Equipment Increase, Cash DecreaseLand Decrease, Building Increase, Equipment Increase, Cash IncreaseCorrect 2 of Item 2
Statement(s)	- Select your answer -Balance SheetIncome StatementBalance Sheet and Income StatementCorrect 3 of Item 2

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Balance Sheet		Income Statement
Assets	=	Liabilities	+	Stockholders' Equity		Revenues		Expenses	=	Net Income
- Select your answer -Accounts ReceivableDepreciation ExpenseFixed Assets ExpenseLandRetained EarningsNo EntryCorrect 1 of Item 3		- Select your answer -Accounts ReceivableAccumulated DepreciationBuildingCashFixed Assets ExpenseNo EntryCorrect 3 of Item 3			- Select your answer -Accounts ReceivableAccumulated DepreciationBuildingCashFixed Assets ExpenseNo EntryCorrect 6 of Item 3		- Select your answer -Accounts ReceivableDepreciation ExpenseFixed Assets ExpenseLandRetained EarningsNo EntryCorrect 8 of Item 3
- Select your answer -Accounts ReceivableAccumulated DepreciationBuildingFixed Assets ExpenseNotes PayableNo EntryCorrect 11 of Item 3		- Select your answer -Accounts PayableAccounts ReceivableDepreciation ExpenseEquipmentEquipment ExpenseNo EntryCorrect 13 of Item 3			- Select your answer -Accounts PayableAccounts ReceivableDepreciation ExpenseEquipmentEquipment ExpenseNo EntryCorrect 16 of Item 3		- Select your answer -Accounts ReceivableAccumulated DepreciationBuildingFixed Assets ExpenseNotes PayableNo EntryCorrect 18 of Item 3
- Select your answer -Accounts PayableAccounts ReceivableDepreciation ExpenseEquipmentEquipment ExpenseNo EntryCorrect 21 of Item 3		- Select your answer -Accounts PayableAccounts ReceivableAccumulated DepreciationCashEquipmentNo EntryCorrect 23 of Item 3			- Select your answer -Accounts PayableAccounts ReceivableAccumulated DepreciationCashEquipmentNo EntryCorrect 26 of Item 3		- Select your answer -Accounts PayableAccounts ReceivableDepreciation ExpenseEquipmentEquipment ExpenseNo EntryCorrect 28 of Item 3
- Select your answer -Accounts ReceivableAccounts PayableAccumulated DepreciationCashDepreciation ExpenseNo EntryCorrect 31 of Item 3		- Select your answer -Accounts ReceivableCashDepreciation ExpenseFixed Assets ExpenseLandNo EntryCorrect 33 of Item 3			- Select your answer -Accounts ReceivableCashDepreciation ExpenseFixed Assets ExpenseLandNo EntryCorrect 36 of Item 3		- Select your answer -Accounts PayableAccounts ReceivableAccumulated DepreciationCashDepreciation ExpenseNo EntryCorrect 38 of Item 3

2. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2014 on these newly acquired assets. You can assume zero residual value for all assets. Round your answers to the nearest whole dollar. If an amount is zero, enter "0".

Assets	2014 Depreciation
Land:	$
Building:	$
Equipment:	$

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3. How would the assets appear on the balance sheet as of December 31, 2014?

Grocery Store
Balance Sheet (Partial)
December 31, 2014
Long-term assets:
	$
	$
	$
Total long-term assets	$