Answered

Welcome to Westonci.ca, the place where your questions are answered by a community of knowledgeable contributors. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly 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  

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.