Exercise 8-2 Lump-Sum Purchase
Exercise 8-2Â Lump-Sum Purchase
To add to his growing chain of grocery stores, on January 1, 2014, Danny Marks bought a gro- cery store of a small competitor for $520,000. An appraiser, hired to assess the acquired assets’ values, determined that the land, building, and equipment had market values of $200,000,
$150,000, and $250,000, respectively.
Required
1.       What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition.
2.       Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Deter- mine the amount of depreciation expense for 2014 on these newly acquired assets. You can assume zero residual value for all assets.
3.       How would the assets appear on the balance sheet as of December 31, 2014?
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Answers
Status NEW
Posted 23 Apr 2017 11:04 AM
My Price 8.00
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Attachments
file 1492948575-1416781_1_636283875640986030_Lump-sum-Purchase-depreciation.xlsx preview (175 words )
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