Question

9)Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $2,375,000. Harding paid $700,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $740,000; Building, $2,200,000 and Equipment, $1,460,000. (Round percentages to two decimal places: ie .054 = 5%). What value will be recorded for the building?

• $350,000

• $175,000

• $1,187,500

• $2,200,000

10)What journal entry would be used to record the purchase of the above assets?

• Land	740,000
  Building	2,200,000
  Equipment	1,460,000
  Cash		4,400,000

• Land	740,000
  Building	2,200,000
  Equipment	1,460,000
  Cash		700,000
  Notes payable		3,700,000

• Land	740,000
  Building	2,200,000
  Equipment	1,460,000
  Cash		1,675,000
  Notes payable		700,000
  Gain on purchase of long-term assets		2,025,000

• Land	403,750
  Building	1,187,500
  Equipment	783,750
  Cash		700,000
  Notes payable		1,675,000

Answer 1

9. $1,187,500

2375000 X 2200000/4400000

10. Land 403,750

Building 1187500

Equipment 783750

Cash 700,0000

Notes Payable 1,675,000