Question

Maplewood Properties bought three lots in a subdivision for a? lump-sum price. An independent appraiser valued the lots as? follows: LOADING...?(Click the icon to view the? values.) Maplewood paid $ 355 comma 000 in cash. Record the purchase in the? journal, identifying each? lot's cost in a separate Land account. Round decimals to two? places, and use the computed percentages throughout. ?(Record a single compound journal entry. Record debits? first, then credits. Select the explanation on the last line of the journal entry? table.)

lot 1-----76,500

lot 2-----229,500

lot 3-----204,000

Answer 1

Allocation of cost to each lot
	Appraisal value	% of $510,000 (a)	Purhase cost (b)	Cost allocated      (a x b)
Lot 1	$76,500	15%	$355,000	$53,250
Lot 2	$229,500	45%	$355,000	$159,750
Lot 3	$204,000	40%	$355,000	$142,000
Total	$510,000	100%		$355,000

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Date	Account titles and Explanation	Debit	Credit
	Land - Lot 1	$53,250
	Land - Lot 2	$159,750
	Land - Lot 3	$142,000
	Cash		$355,000
	(To record lots purchased))