Ace company purchased office equipment for 22000 terms 210

Reference no: EM13590776

1. Natchez Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Vivace Co., for a lump-sum price of $1,000,300. At the time of purchase, Vivace's assets had the following book and appraisal values.

Book Values Appraisal Values
Land $285,800 $214,350
Buildings 357,250 500,150
Equipment 428,700 428,700

To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.

Land 214,350
Buildings 357,250
Equipment 428,700
Cash 1,000,300

2. Arawak Enterprises purchased store equipment by making a $2,858 cash down payment and signing a 1-year, $32,867, 10% note payable. The purchase was recorded as follows.

Store Equipment 39,012
Cash 2,858
Note Payable 32,867
Interest Payable 3,287

3. Ace Company purchased office equipment for $22,000, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:

Office Equipment 22,000
Cash 21,560
Purchase Discounts 440

4. Paunee Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $38,583. The company made no entry to record the land because it had no cost basis.

5. Mohegan Company built a warehouse for $857,400. It could have purchased the building for $1,057,460. The controller made the following entry.

Warehouse 1,057,460
Cash 857,400
Profit on Construction 200,060

Prepare the entry that should have been made at the date of each acquisition

Reference no: EM13590776

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