Greer Manufacturing Purchases Property That Includes Land,buildings and Equipment for $8,250,000.The

question 76

Essay

Greer Manufacturing purchases property that includes land,buildings and equipment for $8,250,000.The company pays $270,000 in legal fees,$330,000 in commissions,and $150,000 in appraisal fees.The land is estimated at 25%,the buildings are at 40%,and the equipment at 35% of the property value.
Required:
Part a.Determine the total acquisition cost of this "basket purchase."
Part b.Allocate the total acquisition cost to the individual assets acquired.
Part c.Prepare the journal entry to record the purchase assuming that the company paid 50% of the amounts using cash and signed a note (due in five years)for the remainder.

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Definitions:

Financial Statement

Reports that present the financial performance, position, and cash flows of a business for a specified period.

Permanent/Temporary

Terms used to distinguish between accounts or items that either persist over multiple accounting periods (permanent) or exist for only one period (temporary).

Normal Balance

The side (debit or credit) of an account that is typically increased in accounting.

Financial Statement

Reports that provide detailed information about a company's financial performance and position.