Answer:
The value recorded for the building = $140,000
Explanation:
From the appraisal of the property, the following information is given:
Value of land = $296,000
Value of building = $880,000
value of equipment = $584,000
Total = 296,000 + 880,000 + 584,000 = $1,760,000
Next, we will calculate the percentage of the total value allocated to the building as follows:
Percentage allocated to building = (value of building ÷ total value) × 100
= (880,000 ÷ 1,760,000) × 100
= 0.5 × 100 = 50%
Next, since we now know that the building takes 50% of the property cost, and since $280,000 was paid, the value recorded for building will be 50% of the $280,000 paid, and this is calculated as follows:
value recorded for building = 50% of 280,000
= 50/100 × 280,000 = 0.5 × 280,000 = $140,000
