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3 August, 13:35

Alpha paid $45,000 cash for the lump sum purchase. What value should be allocated to the following? (Enter only whole dollar values.) 1. Land 2. Building 3. Equipment

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  1. 3 August, 16:26
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    Value allocation is mentioned below:

    Land - $ 7500 Building - $15,000 Equipment - $22,500

    Explanation:

    At first, we have to calculate the ratio of appraised value to allocate the lump sum purchase amount.

    Land - $10,000

    Building - $20,000

    Equipment - $30,000

    Total : $60,000

    Acquisition price for : $45,000

    Percentage of appraised value : $ 45000/60000 * 100 = 75%.

    After paying the $ lump sum cash 45000, below mentioned are the values allocated to following.

    Land - $ 7500

    Building - $15,000

    Equipment - $22,500

    Total Paid : $45000
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