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[The following information applies to the questions displayed below.] Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $830,000. The estimated market values of the purchased assets are building, $434,750; land, $259,000; land improvements, $55,500; and four vehicles, $175,750.

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 $29,000 salvage value. 3. Compute the first-year depreciation expense on the land improvements assuming a five-year life and double-declining-balance depreciation.

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

Allocation of total cost	Appraised Value	Percent of Total Appraised Value		x	Total cost of Acquisition	Apportioned Cost
Building	$434,750		%	x	$830,000
Land	259,000		%	x	$830,000
Land improvements	55,500		%	x	$830,000
Vehicles	175,750		%	x	$830,000
Total	$925,000		%			$0

2)

• Record the costs of lump-sum purchase.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jan 01

3)

Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $29,000 salvage value. (Round your answer to the nearest whole dollar.)

	Depreciation expense on building_________

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

Depreciation expense on land improvements_____________