A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $57,500; the land at $48,600, and the parking lot at $18,900. Land should be recorded in the accounting records with an allocated cost of:

Question

Business

Talan Klein

28 July, 15:13

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $57,500; the land at $48,600, and the parking lot at $18,900. Land should be recorded in the accounting records with an allocated cost of:

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Nigel Friedman · Answer 1

=$38,800

Explanation:

Assets are recorded in accounting books at their purchase price plus other related acquisition costs. For this company, the total amount incurred is $100,000. The three assets will be recorded proportionately to their appraised value.

The total appraised value is $57,500 + _$48,600 + $18,900

=$125,000

The appraised value for land is $48,600,

the land will be recorded at

=48,600 / 125,000 x 100,000

=$38,800