Question
Recording a Lump-Sum Acquisition Freeman Company purchased a tract of land on which were located a warehouse and an office building. The cash purchase price
Recording a Lump-Sum Acquisition
Freeman Company purchased a tract of land on which were located a warehouse and an office building. The cash purchase price was $308,000 plus $22,000 in fees connected with the purchase. The following information relates to the property.
| Tax Assessment | Sellers Book Value | Original Cost | |
|---|---|---|---|
| Land | $44,000 | $22,000 | $22,000 |
| Warehouse | 88,000 | 44,000 | 132,000 |
| Building | 132,000 | 110,000 | 176,000 |
Prepare the journal entry to record this purchase.
| Account Name | Dr. | Cr. |
|---|---|---|
| Land | ||
| Warehouse | ||
| Building | ||
| Cash |
Why use the number in "Tax assessment" instead of "seller's book value"? Thanks.
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IT Audit In China
Authors: LIU Ruzhuo
1st Edition
981428145X, 978-9814281454
