6. On April 1, 20x2, a company purchased for $270,000 a tract of land on which w

Question

6. On April 1, 20x2, a company purchased for $270,000 a tract of land on which were located a warehouse and office building. The following data were collected concerning the property. DATA FOR LUMP SUM PURCHASE OF ASSETS AT APRIL 1, 20x2 Current Assessed Vendor's Valuation Original Cost Land 87,500 70,000 Warehouse 37,500 40,000 Office Building 100,000 90,000 What are the appropriate amounts that the company should record for the land, warehouse, and office building, respectively? (a) Land, S 94,500; Warehouse, $54,000; Office Building, $121,500. (b) Land, $105,000; Warehouse, $45,000; Office Building, $120,000. (C) Land, $ 70,000; Warehouse, $40,000; Office Building, S 90,000. (d) Land, $ 87,500; Warehouse, $37,500; Office Building, $110,000.

Explanation / Answer

Solution: Land 105,000; Warehouse 45,000; Office Building 120,000

Working:

Land: 87,500 / 225,000 * 270,000 = 105,000

Warehouse: 37,500 / 225,000 * 270,000 = 45,000

Office Building: 1,00,000 / 225,000 * 270,000 = 120,000

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.