Question 1


1 pt


Progress:


0/1 item

Lump-Sum Purchase

To add to his growing chain of grocery stores, on January 1, 2017, Danny Marks bought a grocery store of a small competitor for $439,000. An appraiser, hired to assess the acquired assets’ values, determined that the land, building, and equipment had market values of $170,280, $129,000, and $216,720, respectively.


Required:


1.

What is the acquisition cost of each asset? Do not round intermediate calculations. If required, round your final answers to the nearest dollar.


AssetAcquisition Cost

Land:$Building:$Equipment:$

Identify and analyze the effect of the acquisition.

Activity

Accounts

Statement(s)

How does this entry affect the accounting equation?

If a financial statement item is not affected, select “No Entry” and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.


Balance Sheet


Income Statement


Stockholders’NetAssets=Liabilities+Equity


Revenues-Expenses=Income


2.

Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2017 on these newly acquired assets. Assume zero residual value for all assets. Round your answers to the nearest whole dollar. If an amount is zero, enter “0”.


Assets2017 Depreciation

Land:$Building:$Equipment:$


3.

How would the assets appear on the balance sheet as of December 31, 2017?


Grocery StoreBalance Sheet (Partial)December 31, 2017

Long-term assets:

$

$

$

Total long-term assets$