Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. good buy banners pays $220,000 cash for a group pu

Good Buy Banners pays $220,000 cash for a group purchase of land, building, and equipment....

50.1K

Verified Solution

Question

Accounting

Good Buy Banners pays $220,000 cash for a group purchase of land, building, and equipment. At the time of acquisition, the land has a market value of $36,000, the building $156,000, and the equipment $48,000. Journalize the lump-sum purchase.
First, refer to the information provided and calculate the ratio of each asset's market value to the total for all assets combined. Then, complete the table and calculate the assigned cost for each asset
\table[[\table[[Asset]],Market Value,\table[[Percentage],[of Total Value]],x,\table[[Total],[Purchase],[Price]],,\table[[Assigned],[Cost of Each],[Asset]]],[Land,:',%,x,,=,],[Building,,%,x,,=,],[Equipment,,%,x,,=,],[Total,,%,,,=,]]
Now, journalize the lump-sum purchase. (Record a single compound journal entry. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
\table[[Date,Accounts and Explanation,Debit,Credit],[,Land,,],[,Building,Equipment,],[,Cash,,],[,To record purchase of the assets with cash.,,]]
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students