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, $499,800; land, $333,200; land improvements, $68,600; and four vehicles, $78,400.

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 $31,000 salvage value.

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

1A

Allocation	Appraised Value	Percent of Appraised Values	X	Total Acquisition	Apportioned cost
Building			x
Land			x
Land improvements			x
Vehicle			x
Total			x

Journal Entry

Jan 1

Required 2

Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value (Round your answer to the nearest whole dollar)

Required 3

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