Question
Lump-Sum Purchase To add to his growing chain of grocery stores, on January 1, 2017, Danny Marks bought a grocery store of a small competitor
Lump-Sum Purchase
To add to his growing chain of grocery stores, on January 1, 2017, Danny Marks bought a grocery store of a small competitor for $635,000. An appraiser, hired to assess the acquired assets' values, determined that the land, building, and equipment had market values of $229,350, $173,750, and $291,900, 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: | $fill in the blank 326e29001fa6012_3 |
Identify and analyze the effect of the acquisition.
Activity | |
Accounts | |
Statement(s) |
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 | |||||||||||||
Stockholders' | Net | |||||||||||||
Assets | = | Liabilities | + | Equity | Revenues | Expenses | = | Income | ||||||
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2. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2017 on these newly acquired assets. Assume zero residual value for all assets. Round your answers to the nearest whole dollar. If an amount is zero, enter "0".
Assets | 2017 Depreciation |
Land: | |
Building: | |
Equipment: |
3. How would the assets appear on the balance sheet as of December 31, 2017?
Grocery Store | ||
Balance Sheet (Partial) | ||
December 31, 2017 | ||
Long-term assets: | ||
$fill in the blank b30ee702501ef89_2 | ||
$fill in the blank b30ee702501ef89_4 | ||
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$fill in the blank b30ee702501ef89_9 | ||
fill in the blank b30ee702501ef89_11 | fill in the blank b30ee702501ef89_12 | |
Total long-term assets | $fill in the blank b30ee702501ef89_13 |
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