Perry Corporation acquired land, buildings, and equipment from a bankrupt compan

Question

Perry Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sumprice of $550,000. At the time of acquisition Perry paid $50,000 to have the assets appraised. Theappraisal disclosed the following values:

Land $320,000

Buildings 256,000

Equipment 64,000

What cost should be assigned to the land, buildings, and equipment, respectively?

a. $400,000, $320,000, and $80,000.

b. $275,000, $220,000, and $55,000.

c. $300,000, $240,000, and $60,000.

d. $200,000, $200,000, and $200,000

Explanation / Answer

Answer is C

Land=Lumpsum price including cost for assets appraised/Total value of Appraisal assets=Appraisal value of land

=$600,000/$640,000*$320,000=$300,000

Buildings=$600,000/$640,000*$256,000=$240,000

Equipment=$600,000/$640,000*$64,000=$60,000

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