Laural Company paid USD 840,000 cash for real property consisting of a tract of
ID: 2425376 • Letter: L
Question
Laural Company paid USD 840,000 cash for real property consisting of a tract of land and a building. The company intended to remodel and use the old building. To allocate the cost of the property acquired, Laural had the property appraised. The appraised values were as follows: land, USD 576,000, and office building, USD 384,000. The cost of clearing the land was USD 18,000. The building was remodeled at a cost of USD 76,800. The cost of a new identical office building was estimated to be USD 432,000. Prepare a schedule showing the cost of the assets acquired.
Explanation / Answer
SCHEDULE SHOWING THE COST OF THE ASSETS ACQUIRED ($):__________
Land & Buildings 840,000
Add: Cost of clearing the land 18,000
Add: Cost of remoleling of building 76,800 934,800
Cost of new Building 432,000
Total cost of assets acquired 1,366,800
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