Answer and Explanation:
a. The allocation of the total cost among the three assets is shown below:
(a) (b) (a × b)
Appraise value Total appraised Total cost of Apportioned
value cost
Percentage acquisition
Land $260,000 50% $342,225 $171,112.50
Land
improvemnts $104,000 20% $342,225 $68,445
Building $156,000 30% $342,225 $102,667.50
Total $520,000
b. The journal entry to record the purchase is given below:
Land $171,112.50
Land improvements $68,445
Building $102,667.50
To Cash $342,225
(To record the purchase)
Here the asset is debited as it increased the assets and cash is credited as it decreased the assets
