D ezto.mheducation.com/hm.tpx connedt ACCOUNTING nting ulz oQuestion 6 (of 10) A

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D ezto.mheducation.com/hm.tpx connedt ACCOUNTING nting ulz oQuestion 6 (of 10) A company purchases property that includes land, buildings and equipment for $4.6 million. The company pays $184,000 in legal fees, $224,000 in commissions, and $101,000 in appraisal fees. The land is estimated at 23%, the buildings are at 38%, and the equipment at 39% of the property value Required a. Determine the total acquisition cost of this "basket purchase (Enter your answer in whole dollars and not in millions.) cquisition cost b. Allocate the total acquisition cost to the individual assets acguired (Enter your answers in whole dollars and not in millions.) Land Buildings quipment DELL

Explanation / Answer

Cost of Purchase of property              $ 46,00,000

Add : Legal Fees                               $ 1,84,000

Add : Commission Paid                     $ 2,24,000

Add : Appraisal Fees                        $ 1,01,000

(a) Total Acquisition Cost                 $ 51,09,000

(b) Allocation of total acquisition cost to the individual assets

Land ($ 51,09,000 x 23% )                $ 11,75,070                

Building ($ 51,09,000 x 38% )          $ 19,41,420

Equipment ($ 51,09,000 x 39% )       $ 19,92,510

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