show all calculations

1. Orangeville Company

On May 5, 2001, Orangeville Company made a basket purchase of a property for $400,000 cash. The property included the following capital assets:

	appraised value
land	120,000
building	200,000
equip	100,000
paved area	20,000
lighted area	10,000
	450,000

a) Give the journal entry to allocate the purchase price between the above assets. Round all amounts to the nearest dollar, if necessary.

b) On January 1, 2001, Orangeville had purchased a patent for $2,500,000. The patent's legal life is 20 years but the company estimates that the patent's useful life will only be 5 years from the date of acquisition. Prepare the journal entry to amortize the patent at year end on December 31, 2001.