A company purchased property for $100,000. The property included a building, a parking lot, and land....

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A company purchased property for $100,000. The property included a building, a parking lot, and land....

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $54,500; the land at $51,000, and the parking lot at $19,500. Land should be recorded in the accounting records with an allocated cost of:

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Answer 1

Answer #1

Assets	Fair value	Percentage of fair value	Allocated cost
Building	54,500	54,500/125,000 = 43.6%	100,000 x 43.6% = $43,600
Parking lot	19,500	19,500/125,000 = 15.6%	100,000 x 15.6% = $15,600
Land	51,000	51,000/125,000 = 40.8%	100,000 x 40.8% = $40,800
Total	$125,000	100%	$100,000

Land should be recorded at $40,800

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