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4 March, 10:55

Tonto Company purchased property for $125,000. The property included a building, equipment and land. The building was appraised at $72,000, the land at $50,000, and the equipment at $23,000. What is the amount of cost to be allocated to the building in the accounting records

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  1. 4 March, 11:55
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    The cost allocated to the building is $ 62,068.97

    Explanation:

    The total appraised cost for the components of the property purchased=$72,000+$50,000+$23,000=$ 145,000.00

    The cost allocated to the building in the accounting records is the cost of the property multiplied by the building appraised value of $72,000 while dividing by the total of the appraised value of $145,000

    cost allocated to building=$125,000*$72,000/$145,000=$ 62,068.97
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