ocate 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 $27,000 salvage value. 3. Compute the first-year depreciation expe

1-a. The answers are as follows:

Cost allocated to building = $410,000

Cost allocated to land = $213,200

Cost allocated to land improvement = $41,000

Cost allocated to four vehicles = $155,800

1-b Debit Building for $410,000; Debit Land for $213,200; Debit Land improvement for $41,000; Debit Vehicles for $155,800; and Credit Cash for $820,000.

2. The first-year depreciation expense on the building is $25,533.33.

3. The first-year depreciation expense on the land improvements is $16,400.

Explanation:

Note: This question is question is not complete. The complete question is therefore provided before answering the question as follows:

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, $480,000; land, $249,600, land improvement, $48,000; and four vehicles, $182,400.

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 $27,000 salvage value.

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

The explanation of the answer is now given as follows:

1-a. Allocate the lump-sum purchase price to the separate assets purchased.

This can be done as follows:

Total estimated market value = $480,000 + $249,600 + $48,000 + $182,400 = $960,000

Weight of an asset = Estimated market value of the asset / Total estimated market value …… (1)

Using equation (1), we have:

Weight of building = $480,000 / $960,000 = 0.50

Weight of land = $249,600 / $960,000 = 0.26

Weight of land improvement = $48,000 / $960,000 = 0.05

Weight of four vehicles = $182,400 / $960,000 = 0.19

Cost allocated to each asset = Weight of the asset * Total cash price …………………… (2)

Using equation (2), we have:

Cost allocated to building = 0.50 * $820,000 = $410,000

Cost allocated to land = 0.26 * $820,000 = $213,200

Cost allocated to land improvement = 0.05 * $820,000 = $41,000

Cost allocated to four vehicles = 0.19 * $820,000 = $155,800

1-b. Prepare the journal entry to record the purchase.

The journal entries will look as follows:

Date         Account Title                   Dr ($)                    Cr ($)        

Jan. 1       Building                           410,000

                Land                                213,200

                Land improvement           41,000

                Vehicles                          155,800

                       Cash                                                      820,000

                (To record the lump-sum payment for the purchase of several assets.)    

2. Compute the first-year depreciation expense on the building using the straight-line method, assuming a 15-year life and a $27,000 salvage value.

The annual depreciation can be calculated using the following formula:

Annual depreciation expense = (Cost allocated to building – Salvage value) / Expected year life = ($410,000 - $27,000) / 15 = $25,533.33

Therefore, the first-year depreciation expense on the building is $25,533.33.

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

We first calculate the double-declining-balance depreciation rate as follows:

Straight line depreciation rate = 1 / Number of years of life = 1 / 5 = 0.20, or 20%

Double-declining depreciation rate = Straight line depreciation rate * 2 = 20% * 2 = 40%

Therefore, we have:

First-year depreciation expense = Cost allocated to land improvement * Double-declining depreciation rate = $41,000 * 40% = $16,400

Therefore, the first-year depreciation expense on the land improvements is $16,400.

there was no passage listed but using the process of elimination i'd say it was d. the high economy would do the opposite. i don't see how low prices would affect it. high unemployment is possible but i feel d is the better answer.

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation: