Problem 10-1A Plant asset costs; depreciation methods LO C1, P1

Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2017, at a total cash price of $840,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $497,500; land, $308,450; land improvements, $69,650; and four vehicles, $119,400. The companys fiscal year ends on December 31.

Required:

1-a. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. 1-b. Prepare the journal entry to record the purchase. 2. Compute the depreciation expense for year 2017 on the building using the straight-line method, assuming a 15-year life and a $29,000 salvage value. 3. Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining-balance depreciation.

Prepare a table to allocate the lump-sum purchase price to the separate assets purchased. Appraised Value Total cost of Apportioned Acquisition Cost Allocation of total cost Building Land Land improvements Vehicles Total Percent of Total Appraised Value % 1% x % % Journal entry worksheet 1 Record the costs of lump-sum purchase. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01 Record entry Clear entry View general journal Required 1A Required 1B Required 2 Required 3 Compute the depreciation expense for year 2017 on the building using the straight-line method, assuming a 15-year life and a $29,000 salvage value. (Round your answers to the nearest whole dollar.) Depreciation expense on building Complete this question by entering your answers in the tabs below. Required 1A Required 1B Required 2 Required 3 Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining- balance depreciation. Depreciation expense on land improvements