Reference no: EM133140395
Questions -
Q1. Georgian Auto Body bought a shop from an existing business on June 15 with cash. The purchase includes the land, building and all of the equipment inside. The total price of the purchase was$1 500 000. The fair market value for the land was $800,000. The fair market value for the equipment was $400,000. The fair market value for the building was $600,000.
a. Calculate the cost allocation for this basket purchase based on the fair market values given.
b. Record the journal entry for this purchase.
Q2. On September 12, Olympia Construction trades a truck with the historical cost of $24 ,000 and a fair market value of $18 000 for a cement cutter. The cement cutter belonged to Chi Brothers Construction and had a historical cost of $22 000 and a fair market value of $18 000.
a. Record the transaction for Olympia Construction.
b. Record the transaction for Chi Brothers Construction.
Q3. On July 25, Ahmed Lecaj bought land for his business. The land cost $60 000. To ready the land for use, Ahmed had to pay for landscaping, $40 000; drainage and sewers, $30 000; inspection, $5 000; real estate commission, $10 000; and legal fees, $500. Record the purchase of the land.