Answer:
Land $81,500; Land Improvements $32,600; Building $48,900
Explanation:
Calculation for What should be the allocation of this property's costs in the company's accounting records
First step is to calculate the total value
Total value= $87,500 + $35,000 + $52,500
Total value= $175,000
Second step
Land appraised = $87,500 ÷ $175,000
Land appraised= 0.50
Land improvement = $35,000 ÷ $175,000
Land improvement = 0.20
Building appraised = $52,500 ÷ $175,000
Building appraised = 0.30
Third step is to calculate the Total Amount
Total Amount= $150,000 + $150,000 × 0.06 + $4,000
Total Amount= $150,000 + $9,000 + $4,000
Total Amount= $163,000
Last step is to calculate the allocation of this property's costs in the company's accounting records
Land appraised = $163,000 × 50%
Land appraised = = $81,500
Land improvement = $163,000 × 20%
Land improvement= $32,600
Building appraised = $163,000 × 30%
Building appraised = $48,900
Therefore What should be the allocation of this property's costs in the company's accounting records is :
Land $81,500; Land Improvements $32,600; Building $48,900
