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$
