Riverwood Properties bought three lots in a subdivision for a? lump-sum price. An independent appraiser valued the lots as?

Lot Appraised Value

Lot 1 ... 76,500

Lot 2 ... 229,500

Lot 3 ... 204,000

Riverwood paid $ 355,000 in cash. Record the purchase in the journal, identifying each lot's cost in a separate Land account. Round decimals to two places, and use the computed percentages throughout?

The cost allocation of each lot is presented below:

(A) (B) (A * B)

Lot Appraised Value Percentage Purchase value Allocated cost

Lot 1 $76,500 15% $355,000 $53,250

Lot 2 $229,500 45% $355,000 $159,750

Lot 3 $204,000 40% $355,000 $142,000

Total $510,000 100% $355,000

Now the journal entry would be

Land - Lot 1 $53,250

Land - Lot 2 $159,750

Land - Lot 3 $142,000

To Cash A/c $355,000

(Being the lots are purchased for cash)