A company purchased property for $145,000. The property included a building, equ

Question

A company purchased property for $145,000. The property included a building, equipment and land. The building was appraised at $100,000, the land at $64,000, and the equipment at $37,000. What is the amount of cost to be allocated to the building in the accounting records?

$0

$72,139

$145,000

$100,000

A company purchased property for $145,000. The property included a building, equipment and land. The building was appraised at $100,000, the land at $64,000, and the equipment at $37,000. What is the amount of cost to be allocated to the building in the accounting records?

$0

$72,139

$145,000

$100,000

Explanation / Answer

Total appraised Value = 100000+64000+37000 i.e 201000

Purchase value = 145000

Amount of cost allocated to land = 145000/201000*100000 i.e 72139

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