es of QUESTION 1 Answer saved Marked cut of 4.00 Flag question WEICK Allocation

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es of QUESTION 1 Answer saved Marked cut of 4.00 Flag question WEICK Allocation of Package Purchase Price Tamock Company purchased a plant from one of its suppliers. The $950,000 purchase price included the land, a building, and factory machinery. Tamock also paid $5,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased: Finish a Time le Assessed Value Property Land Building Machinery $126,000 486,000 288.000 $900,000 Total using the assessed value as a guide, allocate the total purchase price of the plant to the land, building, and machinery accounts in Tamock Companys records Allocation of Asset Purchase Price Land Building Machinery Total Next page Save Answers

Explanation / Answer

1) Allocation of purchase price :

2) Return on assets ratio = Net income/average assets

Assets turnover sales = Sales/average assets

average assets 2015 = (105676+98700/2) = 102188

Average assets 2016 = (98700+118128/2) = 108414

Assessed value Allocation of purchase price Land 126000 955000*126000/900000 133700 Building 486000 955000*486000/900000 515700 Machinery 288000 955000*288000/900000 305600 Total 900000 955000

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