Required information Journal entry worksheet

$1$

Record the costs of lump$-$sum purchase.

Note: Enter debits before credits. Depreciation expense on building Depreciation expense on land improvements

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Timberly Construction makes a lump$-$sum purchase of several assets on January $1$ at a total cash price of $$900,000.$ The estimated market values of the purchased assets are building, $$508,800$; land, $$297,600$; land improvements, $$28,800$; and four vehicles, $$124,800.$

Required:

$1-$a$.$ Allocate the lump$-$sum purchase price to the separate assets purchased.

$1-$b$.$ Prepare the journal entry to record the purchase.

$2.$ Compute the first$-$year depreciation expense on the building using the straight$-$line method, assuming a $15-$year life and a $$27,000$ salvage value.

$3.$ Compute the first$-$year depreciation expense on the land improvements assuming a five$-$year life and double$-$declining$-$balance depreciation.