2. A company purchased a plant, including land, building, and machinery, for S11

Question

2. A company purchased a plant, including land, building, and machinery, for S110,000. These items were carried on the books of the seller as follows: Land, $30,000; Building, $80,000, and Machinery, $40,000. Immediately after the purchase, the assets were appraised at the following values: Land, $24,000; Building, S30,000, and Machinery, $66,000. What cost should the company record for the Land, Building and Machinery? Land Building Machinery (a) 22,000 (b) 36,666 (c) $30,000 (d) S 22,000 S 27,500 36,667 S 80,000 S 58,667 S 60,500 S 36,667 S 40,000 S 29,333

Explanation / Answer

Appraised values Proportion of total Amount paid Amount allocated Land 24000 20% 110000 22000 Building 30000 25% 110000 27500 Machinery 66000 55% 110000 60500 Total 120000 110000 Option A is correct

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.