Question

Millburn Corporation has acquired a property that included both land and a building for $ 510 comma 000. The corporation hired an appraiser who has determined that the market value of the land is $ 320 comma 000 and that of the building is $ 470 comma 000. At what amount should the corporation record the cost of​ land

Answer 1

Answer:

cost of land record = $206550

Explanation:

given data

market value of the land = $320000

market value of the building  = $470000

acquired both land and building = $510000

to find out

amount should the corporation record the cost of land

solution

first we find market value to total assets that is

market value to total assets = market value of the land + market value of the building ......................1

put here value

market value to total assets = $320000 + $470000

market value to total assets = $790000

and

share of land in the total market that is

share of land in the total market = $\frac{market\ value\ of \ land}{total\ assets \ value}$   .......................2

put here value

share of land in the total market = $\frac{320000}{790000}$

share of land in the total market = 40.50 %

and

cost of land record = share of land in the total market × acquired both land and building    .......................3

put here value

cost of land record = $510000 × 40.50%

cost of land record = $206550