Timberly Construction makes a lump-sum purchase of several assets on January 1 at a total cash price of $820,000. The estimated market values of the purchased assets are building, $448,500; land, $282,750; land improvements, $39,000; and four vehicles, $204,750.

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 $30,000

salvage value.

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