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Sable Co. paid $400,000 cash for a basket purchase that included land, a building, and equipment. An appraiser estimated the market value of the land to be $100,000, the building to be $350,000, and the equipment to be $50,000. How would you record this event in general journal form?

Respuesta :

Answer:

The journal entry is as follows:

Land A/c Dr. $80,000

Building A/c Dr. $280,000

Equipment A/c Dr. $40,000

       To cash A/c                      $400,000

(To record the fixed assets purchased)

Workings:

Land value:

[tex]=\frac{400,000}{(100,000+350,000+50,000)}\times 100,000[/tex]

= 0.8 × $100,000

= $80,000

Building value:

[tex]=\frac{400,000}{(100,000+350,000+50,000)}\times 350,000[/tex]

= 0.8 × $350,000

= $280,000

Equipment value:

[tex]=\frac{400,000}{(100,000+350,000+50,000)}\times 50,000[/tex]

= 0.8 × $50,000

= $40,000

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