During the current year, the Great Drake Company acquired a manufacturing facility at a total acquisition cost of $4,800,000. The acquisition included the factory building, land, and all existing equipment in the facility. The firm estimates the fair value of the assets if acquired separately at a total of $5,500,000 with the fair value of the factory building at $2,695,000, the fair value of the land at $825.000, and the fair value of the equipment at $1,980,000. Determine the capitalized cost of each asset using the relative fair value method and prepare the necessary journal entry to record the acquisition assuming that Great Drake paid cash for the facility. Determine the capitalized cost of each asset using the table below. Assets Type Factory Building Land Equipment Total Fair Value Account Percentage of Total Fair Value 96 96 96 Total Cost of Manufacturing Facility Allocation to Specific Balance Sheet Accounts Now, prepare the necessary journal entry to record the acquisition, assuming that Great Drake paid cash for the facility. (Record debits first, then credits. Exclude explanations from any journal entries.) Current Year

During the current year, the Great Drake Company acquired a manufacturing facility at a total acquisition cost of $4,800,000. The acquisition included the factory building, land, and all existing equipment in the facility. The firm estimates the fair value of the assets if acquired separately at a total of $5,500,000 with the fair value of the factory building at $2,695,000, the fair value of the land at $825.000, and the fair value of the equipment at $1,980,000. Determine the capitalized cost of each asset using the relative fair value method and prepare the necessary journal entry to record the acquisition assuming that Great Drake paid cash for the facility. Determine the capitalized cost of each asset using the table below. Assets Type Factory Building Land Equipment Total Fair Value Account Percentage of Total Fair Value 96 96 96 Total Cost of Manufacturing Facility Allocation to Specific Balance Sheet Accounts Now, prepare the necessary journal entry to record the acquisition, assuming that Great Drake paid cash for the facility. (Record debits first, then credits. Exclude explanations from any journal entries.) Current Year

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
At the beginning of the current year, JKL Company purchased a mineral mine for P26,400,000 with removable ore estimated at 1,200,000 tons. After it has extracted all the ore, the entity will be required by law to restore the land to its original condition at an estimated cost of P2,100,000. The present value of the estimated restoration cost is P1,800,000. The entity believed that it will be able to sell the property afterwards for P3,000,000. During the current year, the entity incurred P3,600,000 of development cost preparing the mine for production, removed 80,000 tons of ore and sold 60,000 tons. Determine the total amount of depletion should be recorded for the current year. 1,920,000 b. 1,440,000 c. 1,940,000 d. 1,455,000
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