Question

Pina Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $453,600. The estimated fair values of the assets are land $86,400, building $316,800, and equipment $115,200. At what amounts should each of the three assets be recorded? (Round intermediate percentage calculations to 5 decimal places e.g. 18.25124 and final answers to 0 decimal places, e.g. 5,275.)
Recorder AmountLandBuildingEquipment

Answer 1

Answer:

Land = $75,600

Building =  $277,200

Equipment = $100,800

Explanation:

For computing the recorded amount, first we have to determine the total assets fair value which is shown below:

= Land + building + equipment

= $86,400 + $316,800 + $115,200

= $518,400

Now the recorded amount would be

For Land:

= Land ÷ Total estimated fair value × cash payment

= $86,400 ÷  $518,400 × $453,600

= $75,600

For Building:

= Building ÷ Total estimated fair value × cash payment

= $316,800 ÷  $518,400 × $453,600

= $277,200

For Equipment:

= Equipment ÷ Total estimated fair value × cash payment

= $115,200 ÷  $518,400 × $453,600

= $100,800