A company purchased property for $120,000. The property included a building, equ
ID: 2514697 • Letter: A
Question
A company purchased property for $120,000. The property included a building, equipment and land. The building was appraised at $90,000, the land at $59,000, and the equipment at $32,000 for a total appraised value of $181,000. What is the amount of cost to be allocated to the building in the accounting records? (Round your intermediate calculations to 3 decimal places.)
$0
$59,640
$90,000
$120,000
A company purchased property for $120,000. The property included a building, equipment and land. The building was appraised at $90,000, the land at $59,000, and the equipment at $32,000 for a total appraised value of $181,000. What is the amount of cost to be allocated to the building in the accounting records? (Round your intermediate calculations to 3 decimal places.)
Explanation / Answer
B. $59,640
The amount of cost to be allocated to the building in the accounting records is:
= ($90,000 / $181,000) * $120,000
= 0.497 * $120,000
= $59,640
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