What is the acquisition cost of asset

Reference no: EM13151678

To add to his growing chain of grocery stores, on January 1, 2010, Danny Marks bought a grocery store of a small competitor for $520,000. An appraiser, hired to assess the value of the assets acquired, determined that the land had a market value of $200,000, the building a market value of $150,000 and the equipment a market value of $250,000.

Required:

1. What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition.

2. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2010 on these newly acquired assets. You can assume zero residual value for all assets.

3. How would the assets appear on the balance sheet as of December 31, 2010?

Reference no: EM13151678

Questions Cloud

Effects on accounts and financial statements : Illustrate the effects on the accounts and financial statements of the following related transactions of La Paz Company: Purchased $18,400 of merchandise from Harbin Co. on account, terms 2/10, n/30.

How might second mutation lead to restoration of activity : Identify the functional groups in side chain of a protein that can form hydrogen bonds or electrostatic interactions with a side chain of arginine within the same protein with pH of 7.0.

Implications of your recommended course of action : What are your recommendations to the current administration considering the state of the economy and the level of national debt? What are the implications of your recommended course of action?

Income statement and an owner equity statement : Prepare an income statement and an owner's equity statement for the year. The owner did not make any new investments during the year.

What is the acquisition cost of asset : What is the acquisition cost of each asset? Prepare a journal entry to record the acquisition. Danny plans to depreciate the operating assets on a straight-line basis for 20 years. Determine the amount of depreciation expense for 2010 on these newl..

Ten bolts were selected randomly from a production line : Ten bolts were selected randomly from a production line and the diameter of each was measured. Why do these diameters not have a binomial distribution?

Explain that moles of hydrate compound equals the moles : What is the value of x in the formula for the hydrate? (hint: remember that x represents the ratio of moles of H2O to moles of hydrate compound, and that moles of hydrate compound equals the moles of anhydrous compound)

One-country model in section suppose : Country described by the one-country model in section Suppose that the country temporarily raises its levels of γA. Draw graphs showing how the time paths

Indicate what is the structure or the cell component : Pompe's disease is one of a class of lysosomal storage diseases in which one or more enzymes that are normally found in the lysosomes are defective or absent. In Pompe's disease, the enzyme that normally breaks down glycogen is absent.

User Account

All Pages