Answer:
The total purchase price of the plant allocated to the land, building, and machinery is $140,840, $509,707 and $355,453 respectively
Explanation:
The computation is shown below:
For land
= Total purchase price × appraisal value of land ÷ total appraisal value
= $1,006,000 × $126,000 ÷ $900,000
= $140,840
For building
= Total purchase price × appraisal value of building ÷ total appraisal value
= $1,006,000 × $456,000 ÷ $900,000
= $509,707
For machinery
= Total purchase price × appraisal value of land ÷ total appraisal value
= $1,006,000 × $318,000 ÷ $900,000
= $355,453
where, the total purchase price is
= $1,000,000 + $6,000
= $1,006,000
