On Jan 1, 2020, Oshawa Corporation made a basket purchase of land, a building, and furniture and fixtures. The total purchase price was $320,000. Oshawa Corp also paid $3,000 for title fees for the land, $4,000 for renovation of the building and $2,000 to repair the furniture. Appraised values at the time of the purchase were: land $70,000; building, $227,500; and furniture and fixtures,$52,500.

 

a. Allocate the basket purchase price to the land, building and furniture and fixtures (show the computations).  

b. Write the journal entry for the acquisition of the land, building and furniture and fixtures for cash. 

c. The building had an estimated useful life of 20 years and residual value of $30,000. Write the journal entry to record depreciation for 2020 for the building using the double diminishing balance method.