On January 1, 2014, Aaron Simpson Bought a Farm Store

question 6

Essay

On January 1, 2014, Aaron Simpson bought a farm store of a small competitor for $620,000. An appraiser, hired to
assess the acquired assets' value, determined that the land, building, and equipment had market values of $300,000,
$215,000, and $270,000, respectively.
REQUIRED:
1. What is the acquisition cost of each asset? Identify the effects of the transaction on the accounting equation to record the acquisition rounded to the nearest dollar.
2. Simpson plans to depreciate the building on a straight-line basis for 30 years and the equipment over 16 years . Determine the amount of depreciation expense for 2014 on these newly acquired asset srounded to the nearest dollar. You can assume zero residual value for all assets.
3. How would the assets appear on the balance sheet as of December 31, 2014?

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Definitions:

Stiff Material

Substances characterized by their resistance to deformation and changes in shape, often used in contexts requiring structural integrity.

Placeholder

A symbol, word, or phrase used to hold the place of content that has yet to be added or finalized.

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The systematic procedure of organizing and storing documents, records, or information to ensure easy retrieval and efficient management.

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Tools, often used in dentistry or engineering, that rotate to remove or shape material, featuring a circular or cylindrical shape.