Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $840,000. The estimated market values of the purchased assets are building, $455,900; land, $291,000; land improvements, $77,600; and four vehicles, $145,500.

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.

1a

1b. Record the costs of lump-sum purchase :

Allocation of total cost Estimated Market Value Percent of Total X Total cost of Acquisition Apportioned Cost Building % Land % Land improvements % Vehicles Total 0 0 % $ FA 0 Date General Journal Debit Credit January 01