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kumpel [21]
3 years ago
5

Pinewood Company purchased two buildings on four acres of land. The lump-sum purchase price was $2,000,000. According to indepen

dent appraisals, the fair values were $840,000 (building A) and $525,000 (building B) for the buildings and $735,000 for the land. Required: Determine the initial valuation of the buildings and the land.
Asset Initial Valuation

Land

Building A

Building B

Total
Business
1 answer:
Kaylis [27]3 years ago
5 0

Answer:

<em>Initial Assets Valuation</em>

  • Building A = $800,000
  • Building B = $500,000
  • Land = $700,000

Explanation:

According to the Independent Appraisal, the total value of the buildings and the land would be;

= 840,000 + 525,000 + 735,000

= <em>$2,100,000</em>

<em />

The initial valuation of the Assets therefore will be their weights according to the independent appraisal multiplied by the purchase price.

Building A

= \frac{840,000}{2,100,000} * 2,000,000

= $800,000

Building B

= \frac{525,000}{2,100,000} * 2,000,000

= $500,000

Land

= \frac{735,000}{2,100,000} * 2,000,000

= $700,000

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Answer:

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3.33 = 2000 - 1000 / [(2000 + 1000) / 2] / P2 - P1 / [(P2+P1)/2]

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Answer:

Situations during 2011 at an Audit Client

A. Appropriate Reporting Treatments:

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a. As an extraordinary item.

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c. As a prior period adjustment.

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f. As a change in accounting estimate.

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3. A prior period adjustment is the correction of a past accounting error that occurred in the past financial statements.

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