Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $810,000. The estimated market values of the purchased assets are building, $527,350; land, $308,450; land improvements, $69,650; and four vehicles, $89,550.

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.

• Required 1A
• Required 1B
• Required 2
• Required 3

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	$527,350		%	x	$810,000
Land	308,450		%	x	$810,000
Land improvements	69,650		%	x	$810,000
Vehicles	89,550		%	x	$810,000
Total	$995,000	0	%			$0