QUESTION 1 Answer saved Marked out of 4.00 P Flag question Allocation of Package

Question

QUESTION 1 Answer saved Marked out of 4.00 P Flag question Allocation of Package Purchase Price Tamock Company purchased a plant from one of its suppliers. The $975,000 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 Time l 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 Company's records. Allocation of Asset Purchase Price Land Building Machinery Total

Explanation / Answer

Allocation of purchase price :

Assessed Value Allocation of purchase price Land 126000 126000/900000*980000 137200 Building 486000 486000/900000*980000 529200 Machinery 288000 288000/900000*980000 313600 Total 900000 980000

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