Chico Company paid $950,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the

Question

3 years ago

11

Chico Company paid $950,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the

following estimates of the market values of the assets if they had been purchased separately: Office furniture, $190,000; Building, $740,000; and Land, $132,000. Based on this information, what is the cost that should be allocated to the office furniture

Business

1 answer:

kramer · Answer 1 · 2022-04-15T19:02:05+03:00

Answer:

$171,000

Explanation:

The company psid $950,000 for office furniture, building and land

The market value of the assets is

Office furniture= $190,000

Building= $740,000

Land= $132,000

Therefore the cost that should be allocated to the office furniture can be calculated as follows

= 18/100 × 950,000

= 0.18×950,000

= 171,000