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kirza4 [7]
3 years ago
15

Teshin Co. purchases a piece of land with several land improvements for $180,000. The land appraises at $120,000 and the land im

provements appraise at $80,000. The land should be recorded at what cost?
Business
1 answer:
Evgesh-ka [11]3 years ago
8 0

Answer:

$108,000

Explanation:

The land shall be recorded at the following cost in the accounts of Teshin Co.:

Cost of land=(appraised value of land/appraised value of land and improvements)*purchase price of land with several land improvements

Appraised value of land=120,000

Appraised value of land and improvements=120,000+80,000=200,000

Purchase price of land with several improvements=$180,000

Cost of land to be recorded=(120,000/200,000)*180,000

                                              =$108,000

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