Ask Question
19 October, 12:40

Concord Pet Care Clinic paid $200,000 for a group purchase of land, building, and equipment. At the time of the acquisition, the land had a market value of $105,000, the building $63,000, and the equipment $42,000.

Journalize the lump-sum purchase of the three assets for a total cost of $200,000, the amount for which the business signed a note payable.

+2
Answers (1)
  1. 19 October, 12:56
    0
    The journal entry is shown below:

    Land A/c Dr $100,000

    Building A/c Dr $60,000

    Equipment A/c Dr $40,000

    To Cash A/c $200,000

    (Being the lump sum amount is recorded)

    Explanation:

    The journal entry is shown below:

    Land A/c Dr $100,000

    Building A/c Dr $60,000

    Equipment A/c Dr $40,000

    To Cash A/c $200,000

    (Being the lump sum amount is recorded)

    The computation is shown below:

    = (Market value of one asset : Total market value of all assets) * lump-sum amount

    Where,

    Total market value of all assets would be

    = $105,000 + $63,000 + $42,000

    = $210,000

    For land, the value would be

    = ($105,000 : $210,000) * $200,000

    = $100,000

    The above formula is used for rest assets i. e equipment and the building
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Concord Pet Care Clinic paid $200,000 for a group purchase of land, building, and equipment. At the time of the acquisition, the land had a ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers