Timberly Construction negotiates a lump-sum purchase of several assets from a company that is going out of business. The purchase is completed on January 1, 2017, at a total cash price of $830,000 for a building, land, land improvements, and four vehicles. The estimated market values of the assets are building, $529,200; land, $284,200; land improvements, $58,800; and four vehicles, $107,800. The companyโs fiscal year ends on December 31.
Required:1-a. Prepare a table to allocate the lump-sum purchase price to the separate assets purchased.1-b. Prepare the journal entry to record the purchase.2. Compute the depreciation expense for year 2017 on the building using the straight-line method, assuming a 15-year life and a $31,000 salvage value.3. Compute the depreciation expense for year 2017 on the land improvements assuming a five-year life and double-declining-balance depreciation.