Question

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $60,000; the land at $46,600, and the parking lot at $18,400. Land should be recorded in the accounting records with an allocated cost of

Answer 1

$37,280

Step-by-step explanation:

We use the appraised values to apportion the Purchase Cost of the Property to determine the Cost of Land as follows :

Land Cost = $46,600 / $125,000 x $100,000

= $37,280

Land should be recorded in the accounting records with an allocated cost of $37,280.