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Timberly Construction - lump-sum purchase - 17 May, 2013

Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2008, at a total cash price of $900,000 for a building, land, land improvements, and six vehicles. The estimated market values of the assets are building, $508,800; land, $297,600; land improvements, $28,800; and four vehicles, $124,800. The company's fiscal year ends on December 31.

 

Prepare a table to allocate the lump-sum purchase price to the separate assets purchased.

 

journal entry to record the purchase

 

Depreciation expense on building?

Depreciation expense on land improvement?

 

Defend or refute this statement:  Accelerated depreciation results in payment of less taxes of the asset's life.



Category : Financial Accounting

Search Keywords :
Timberly , Construction , Lump-sum , Purchase , Allocate , Depreciation 


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Answer  - 17 May, 2013
Please see the excel attachment. The solution uses a template. Please see the ce....


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