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LenKa [72]
3 years ago
12

Chico Company paid $560,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the

following estimates of the market values of the assets if they had been purchased separately: Office furniture, $140,000; Building, $460,000, and Land, $110,000. Based on this information, what is the cost that should be allocated to the office furniture? (Round your intermediate percentages to four decimal places: ie .054231 = 5.42%.)
Business
1 answer:
s2008m [1.1K]3 years ago
3 0

Answer: $110,432

Explanation:

The cost allocated to the Office furniture is the percentage of total appraised cost * the price paid for the basket purchase because it shows what proportion of the Basket Purchase should be ascribed to the Office furniture.

Total Appraised value = 140,000 + 460,000 + 110,000

= $710,000

Office furniture Proportion = 140,000/710,000

= 0.1971830985

=0.1972

Amount to be allocated to Office furniture = 0.1972 * 560,000

= $110,432

$110,432 should be allocated to the office furniture.

= $110,422.

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2 years ago
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Answer:

The estimate value of the subject property is $8,269,200

The other information that would be desirable in reaching a conclusion:

The closeness of the property to central business districts as the closer it is the higher the asking price.

The estimate was solely based on revenue, the applicable costs have been ignored.

The average taken might not be a good indication for the subject property because the property might have unique features

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In determining the estimate value of the subject property ,we calculate the gross rent multiplier of the new property,then multiply it  with the annual rental income.

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Subject property price=114.85*(120*$600)

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