Question

Rodriguez Company pays $350,000 for real estate plus $18,550 in closing costs. The real estate consists of land appraised at $200,000; land improvements appraised at $80,000, and a building appraised at $120,000. Required: 1. Allocate the total cost among the three purchased assets 2. Prepare the journal entry to record the purchase. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three purchased assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Appraised Value Percent of Total Appraised Value x Total Cost of Acquisition - Apportioned Cost S 200,000 40% Land Land imrnvements * 368,550 * 368,550 80,000 15% 54.283.00

Answer 1

1

	Appraised value	Percent of total appraised value	x Total cost of aquisition	=Approtioned
Land	200,000	50%	50% x 368,550	= 184,275
Land improvement	80,000	20%	20% x 368,550	= 73,710
Building	120,000	30%	30% x 368,550	= 110,565
Total	400,000	100%		368,550

2

Journal

Account Title and Explanation	Debit	Credit
Land	184,275
Land improvement	73,710
Building	110,565
Cash		368,550