Plant acquisitions for selected companies are as follows:

1.

Blossom Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torress assets had the following book and appraisal values:

		Book Value		Appraisal Value
Land		$215,000		$144,000
Buildings		245,000		352,000
Equipment		311,000		311,000

Blossom Industries decided to take the lower of the two values for each asset it acquired. The following entry was made:

Land			144,000
Buildings			245,000
Equipment			311,000
	Cash				700,000

Blossom Industries expects the building structure to last another 20 years; however, it expects that it will have to replace the roof in the next five years. Torres Co. indicated that, on initial construction of the building, the roof amounted to 22% of the cost of the building. Because of the unique design and materials needed to replace the roof, the contractors stated that the roof structure is currently worth 16% of the value of the building purchase.

2.

Hari Enterprises purchased equipment by making a $2,200 cash down payment and signing a $23,100, one-year, 11% note payable. The purchase was recorded as follows:

Equipment			27,841
	Cash				2,200
	Notes Payable				23,100
	Interest Payable				2,541

3.

Kim Company purchased equipment for $20,100, terms 4/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:

Equipment			20,100
	Cash				19,296
	Purchase Discounts				804

4.

Kaiser Inc. recently received land at zero cost from the Village of Chester as an inducement to locate its business in the village. The lands appraised value was $32,700. The company made no entry to record the land because it had no cost basis.

5.

Zimmerman Company built a warehouse for $589,000. It could have contracted out and purchased the building for $733,000. The controller made the following entry:

Buildings			733,000
	Cash				589,000
	Sales Revenue				144,000

Prepare the entry that should have been made at the date of each acquisition. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.)

No.

Account Titles and Explanation

Debit

Credit

Prepare the correcting entry that is required in each case to correct the accounts. In other words, do not simply reverse the incorrect entry and replace it with the entry in the part above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.)

No.

Account Titles and Explanation

Debit

Credit