# Exercise_9-3.pptx - Exercise 9-3 Lump-sum purchase LO1 On...

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Exercise 9-3 Lump-sum purchase LO1

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On April 12, 2017, Prism Ltd., a camera lens manufacturer, paid cash of \$552,375 for real estate plus \$29,400 cash in closing costs. The real estate included land appraised at \$249,480; land improvements appraised at \$83,160; and a building appraised at \$261,360. Prepare a calculation, the allocation of the total cost among the three purchased assets and present the journal entry to record the purchase.
1. 552,375 + 29,400 = 581,775 2. 42% x 581,775 = 244,346 3. 14% x 581,775 = 81,448 4. 44% x 581,775 = 255,981 (a)

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