Question

A building with an appraisal value of $132,970 is made available at an offer price of $154,091. The purchaser acquires the property for $30,971 in cash, a 90-day note payable for $22,282, and a mortgage amounting to $52,517. The cost basis recorded in the buyer's accounting records to recognize this purchase is

Answer 1

Answer:

Total purchase value (Cost basis) = $105,770

Explanation:

Given:

Appraisal value = $132,970

Offer price = $154,091

Cash amount = $30,971

Notes payable = $22,282

Mortgage amount = $52,517

Find:

Total purchase value (Cost basis)

Computation:

Total purchase value (Cost basis) = Cash + Notes payable + Mortgage amount

Total purchase value (Cost basis) = $30,971 + $22,282 + $52,517

Total purchase value (Cost basis) = $105,770