Answered

Get the answers you need at Westonci.ca, where our expert community is always ready to help with accurate information. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Pitney Co. purchased an office building, land, and furniture for $639,300 cash. The appraised value of the assets was as follows:

Land $136,043
Building 179,004
Furniture 400,969
Total $716,016

Required:
a. Compute the amount to be recorded on the books for each asset.
b. Show the purchase in a horizontal statements.
c. Prepare the general journal entry to record the purchase.

Sagot :

Solution :

a). Amount to be recorded on the books for each of the assets.

                          Working                                                  Allocated cost($)

Land        (639,300 / 716,016 )x 136,043                                 121467

Building   (639,300 / 716,016 )x 179,004                                 159825

Furniture   (639,300 / 716,016 )x 400,969                              358008

Total                                                                                          639,300

b). Statement model

Assets : Cash + Land + Building + Furniture

            639,300 + 121,467 +  159825 + 358008

Cash flow = 639,300

c). Journal entry

General journal                        Debit($)           Credit($)

Land                                        121,467

Building                                   159,825

Furniture                                  358,008

Cash                                                             639,300  

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.