nline Ch 5-6 Help Save& ExitSubmit Chico Company paid $500.000 for a basket purc

Question

nline Ch 5-6 Help Save& ExitSubmit Chico Company paid $500.000 for a basket purchase that included office funiture, a building and land. An appraiser provided the s of the market values of the assets If they had been purchased separately Office furniture-$10000 on this information, and rounding allocations to two decimal places, the amount of cost that would be allocated to the ofice furniture is closest 0054231-5.42 to: (Round your intermediate percentages to 2 decimal places: ie Mutiple Choice $10000 $158 333 $52.500 Bo 7 8 9

Explanation / Answer

Solution:(1): Option(a) is correct.

Explanation: Amount of cost to be allocated to office furniture ;

= (110,000*500,000)/(110000+400,000+80,000)

= $93,220

Solution:(2): Option(d) is correct.

Explanation: Depreciation Expense = [(30000-7000)/100000]*36000 = $8,280

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