Question

front-end loader should be reported in IC comput 1 E9-2B. Allocation of Package Purchase Price Joe Comey went into business by purchasing a car lubrica tion station, consisting of land, a building, and equipment. The seller's original asking price was $240.000. Comey hired an appraiser for $3,000 to appraise the assets. The appraised valuations were land, S43.000: building, $95.000; and equipment, $62,000. After receiving the appraisal. Comey of- fered $183,000 for the business. The seller refused this offer. Comey then offered $190,000 for the business, which the seller accepted. Using the appraisal values as a guide, allocate the total purchase price of the car lubrication station to the Land, Building, and Equipment accounts. F9.3 Danraminti •

Answer 1

Total costs incurred for station
Purchase cost	$190,000
Appraiser cost	$3,000
Total costs	$193,000
Land	$43,000
Building	$95,000
Equipment	$62,000
Total value	$200,000
The purchase price would be allocated to each asset based on the proportion of appraised value of the assets in the car lubricant station.
Calculation of amount allocated to each asset is shown below
Land	$41,495	(43000/200000)*193000
Building	$91,675	(95000/200000)*193000
Equipment	$59,830	(62000/200000)*193000
Total	$193,000