Print by: Denise Williams
ACCT 331-001 / Ch.10
(Correction of Improper Cost Entries)
Plant acquisitions for selected companies are as follows.
1. Belanna Industries Inc. acquired land, buildings, and equipment from a bankrupt company,
Torres Co., for a lump-sum price of $700,000. At the time of purchase, Torres's assets had the
following book and appraisal values.
To be conservative, the company decided to take the lower of the two values for each asset
acquired. The following entry was made.
2. Harry Enterprises purchased store equipment by making a $2,000 cash down payment and
signing a 1-year, $23,000, 10% note payable. The purchase was recorded as follows.
3. Kim Company purchased office equipment for $20,000, terms 2/10, n/30. Because the