On April 1, 2020, Renfro Corporation purchased land, a building, and some equipm

Question

 On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The following information is available concerning the property purchased:                                   Current Market Value   Land .......................           148,350   Building ...................           374,100   Equipment ..................              ?  Before the property could be used, Renfro had to spend $12,660 to renovate the building and $7,410 to put the equipment in working order. The cost that was assigned to the building totaled $379,800.  Calculate the cost assigned to the equipment.

Explanation / Answer

Cost of Building $379800 = $374,100/ Total market value of the assets purchased x $633000 - $12660 Total market value of the assets purchased $603,387.10 Market value of Equipment = $603,387.10 - 148350 - 374100 $80,937.10 Cost assigned to the equipment = 80937.10 + 7410 $88,347.10

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