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

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?