Question

Fruitasia purchased land, a building, and equipment for $800,000. the estimated fair values of the land, building, and equipment are $100,000, $700,000, and $200,000, respectively. at what amount would the company record the land?

Answer 1

Given; Equipment and building = $800,000Fair value of the land = $100,000Fair value of the building = $700,000Fair value of the equipment = $200,000
Solution;
$800,000 x [$100,000/($100,000 + $700,000 + $200,000)] = $80,000.
The company would record the land of $80,000