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 $810,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $441,600; land, $297,600; land improvements, $67,200; and four vehicles, $153,600. 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. Allocation of total cost Appraised Value Percent of Total Appraised Value Total cost of Apportioned Acquisition 0 Cost Building Land Land improvements Vehicles Total 0 01% 0