A company purchased property for $140,000. The property included a building, equ

Question

A company purchased property for $140,000. The property included a building, equipment and land. The building was appraised at $78,000, the land at $53,000, and the equipment at $26,000 for a total appraised value of $157,000. What is the amount of cost to be allocated to the building in the accounting records? (Round your intermediate calculations to 3 decimal places.)

$140,000

$69,580

$0

$78,000

A company purchased property for $140,000. The property included a building, equipment and land. The building was appraised at $78,000, the land at $53,000, and the equipment at $26,000 for a total appraised value of $157,000. 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

The following table shows the allocation of cost to Building and other assets

So, as per above calculations, option B is the correct option

Calculations A B = A / 157,000 C D = B x C Particulars Appraised value Percentage of Total Cost to be allocated Allocated cost Building        78,000             0.497    140,000      69,580 Land        53,000             0.338    140,000      47,320 Equipment        26,000             0.165    140,000      23,100 Total      157,000                     1    140,000

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