Problem

Sneathen Company purchased a restaurant building, land, and equipment for $600,000 cash. The appraised value of the assets was as follows:

Land            $ 200,000
Building        480,000
Equipment    120,000
Total            $ 800,000

Required

a. Compute the amount to be recorded on the books for each of the assets.

b. Record the purchase in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). The letters NA indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)