Question

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $52,500; the land at $52,600, and the parking lot at $19,900. Land should be recorded in the accounting records with an allocated cost of:

Answer 1

Answer:

Allocated cost of land  = $42,080

Explanation:

Given:

Total Cost of asset is $100000.

Computation:

Total apprised value = $52,500 + $52,600 + $19,900

Total apprised value = $125,000

Allocated cost of land  = [$52,600 / $125,000]$100,000

Allocated cost of land  = $42,080

The allocated cost of land would be $42,080