Question

On January 1, 2020, Bona Vista Co. purchased land, a building, equipment, and tools for a...

On January 1, 2020, Bona Vista Co. purchased land, a building, equipment, and tools for a total price of $4,770,000, paying cash of $1,194,000 and borrowing the balance from the bank. The bank appraiser valued the assets as follows: $1,218,300 for the land; $1,375,500 for the building; $1,021,800 for the equipment; and $314,400 for the tools.

Prepare the entry to record the purchase. (Do not round intermediate calculations.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

As the individual cost is not available here we should have record it on total cost. While bank valuation for the loan in this question is given, still we dont have to bothered about it. because it only effect in the books of banks. an asset should always be recorded in its cost as per IAS-16 Property Plant and Equipment.

so entry will be.

DATRE PARTICULAR DEBIT CREDIR
January 1, 2020 land, building,equipment,and tools A /c $4,770,000
cash $1,194,000
Bank loan $3,576,000.
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2020, Night’s Watch Industries purchased land with 2 buildings and equipment for a...
On January 1, 2020, Night’s Watch Industries purchased land with 2 buildings and equipment for a total cost of $4,165,000. The company planns to keep Building 1, however will demolish Building 2. The appraised value of each individual asset are shown in the table below. The cost to demolish building 2 is $95,000. Space has been provided below for your calculations (this is optional). Required Complete the table below to allocate the correct cost to each asset. Prepare the journal...
Pitney Co. purchased an office building, land, and furniture for $776,300 cash. The appraised value of...
Pitney Co. purchased an office building, land, and furniture for $776,300 cash. The appraised value of the assets was as follows:      Land $ 139,113   Building 269,531   Furniture 460,812       Total $ 869,456 Required a. Compute the amount to be recorded on the books for each asset. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)          b. Record the purchase in a horizontal statements model like the following one: (Do not round intermediate calculations. Round your...
Bully Co. paid $150,000 for a purchase that included land, building, and equipment. An appraiser provided...
Bully Co. paid $150,000 for a purchase that included land, building, and equipment. An appraiser provided the following estimates of the individual market values of the assets (i.e. if they had been purchased separately): Land, $16,800, Building, $161,700, and Equipment, $31,500. In addition to paying the $150,000 of purchase price for all the assets, Bully spent $9,000 related to the equipment ($3,000 in fines assessed while transporting the equipment*, $4,000 in labor cost to assemble and install the equipment and...
On January 1, 2020, Novotna AG purchased €400,000, 8% bonds of Aguirre Co. for €369,114. The...
On January 1, 2020, Novotna AG purchased €400,000, 8% bonds of Aguirre Co. for €369,114. The bonds were purchased to yield 10% interest. Interest is payable semiannually on July 1 and January 1. The bonds mature on January 1, 2025. Novotna Company plans to hold the bonds to collect contractual cash flows. On January 1, 2022, after receiving interest, Novotna Company sold the bonds for €370,726 to meet its liquidity needs. Required: a. Prepare the journal entry to record the...
On January 16 of year 1 Javier purchased a building, including the land it was on,...
On January 16 of year 1 Javier purchased a building, including the land it was on, to assemble his new equipment. The total cost of the purchase was $1,346,000; $386,000 was allocated to the basis of the land and the remaining $960,000 was allocated to the basis of the building. (Use MACRS Table 1, Table 2, Table 3, Table 4and Table 5.) (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) a. Using MACRS, what...
On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The...
On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The following information is available concerning the property purchased: Current Market Value Land ....................... 150,420 Building ................... 366,240 Equipment .................. ? Before the property could be used, Renfro had to spend $25,320 to renovate the building and $7,140 to put the equipment in working order. The cost that was assigned to the building totaled $379,800. Calculate the cost assigned to the equipment.
Scott Tire Co. began operations January 1, 2012. Keith, the sole proprietor, purchased a building, land,...
Scott Tire Co. began operations January 1, 2012. Keith, the sole proprietor, purchased a building, land, and one piece of machinery in the first year of operations. In the current year, Keith purchased two additional pieces of equipment, and a tow-truck. Keith wants to maximize his depreciation deduction this year. Use the following information to complete a Depreciation Worksheet and then prepare a Form 4562 for the current year for Scott Tire Co. (EIN# 25-6183786) which is owned by Keith....
A corporation purchased land, a building, and equipment for a total cost of $450,000. Fair market...
A corporation purchased land, a building, and equipment for a total cost of $450,000. Fair market values based on an appraisal were determined to be $120,000 for the land, $280,000 for the building, and $80,000 for the equipment. The journal entry to record this purchase would include which of the following: (Answer may be rounded) A a debit to land for $120,000 B a debit to building for $261,000 C a credit to cash for $480,000 D a debit to...
Question 3 Saved Smith Corporation purchased land and a building on Oct. 30th, 2020 for $640,000....
Question 3 Saved Smith Corporation purchased land and a building on Oct. 30th, 2020 for $640,000. The fair value of the land is $170,000 while the fair value of the building is $510,000. For the journal entry to record this purchase what amount should the building be debited? Question 3 options: a) $480,000 b) $510,000 c) $160,000 d) $470,000
Presented below are two independent situations: (a) On January 1, 2020, Bridgeport Inc. purchased land that...
Presented below are two independent situations: (a) On January 1, 2020, Bridgeport Inc. purchased land that had an assessed value of $316,000 at the time of purchase. A $518,000, zero-interest-bearing note due January 1, 2023, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT