Question

Riverboat Adventures pays $310,000 plus $15,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $35,000, a building appraised at $105,000, and paddleboats appraised at $210,000. Compute the cost that should be allocated to the land.

Answer 1

Answer:

The cost should allocate to the land is $32,500.

Explanation:

Please see attachment .

Answer 2

Answer:

Land 32,500

Explanation:

$\left[\begin{array}{cccc}&fair \: value&percent&accounting\\land&35,000&0.1&32,500\\bulding&105,000&0.3&97,500\\paddleboats&210,000&0.6&195,000\\&350000&&325000\\\\\end{array}\right]$

We will first calcualte the percent of each component of the real state.

Then we multiply by the total cost paid, which is 325,000

This is the amount we should enter the assets into accounting