Question

Burleson​, ​inc., purchased a tract of​ land, a small office​ building, and some equipment for $1,550,000. the appraised value of the land was $1,100,000​, the building $600,000​, and the equipment $300,000. what is the cost of the​ land?

Answer 1

To find the land cost, we first find the ratio that is the land at its appraised value. In this case, this would be (1100000/2000000), or 0.55. Then, the price of the purchase for the entire property is multiplied by this rate. This would give a land value of (1550000 * 0.55), or $852,500.