Question

On April 1, 2020, Renfro Corporation purchased land, a building, and some
equipment for $633,000. The following information is available concerning
the property purchased:

                                 Current Market Value
  Land .......................           150,420
  Building ...................           366,240
  Equipment ..................              ?

Before the property could be used, Renfro had to spend $25,320 to renovate
the building and $7,140 to put the equipment in working order. The cost
that was assigned to the building totaled $379,800.

Calculate the cost assigned to the equipment.

Answer 1

Ans;

Total cost of land building and equipment	$ 633,000
Current market value of land and building ($150,420 + $366,240)	$ 516,660
Hence, market current value of equipment ($633,000 - $516,660)	$ 116,340
Additional cost to building	$ 25,320
Total value of building ($366,240 + $25,320)	$ 391,560
Cost assigned to building total	$ 379,800
As per information cost assigned to building is $379,800 hence, cost assigned to equipment is ($391,560 - $379,800)	$ 11,760
Additional cost on equipment to put equipment on working condition	$ 7,140
Total cost assigned to equipment ($116,340 + $11,760 + $7,140)	$ 135,240

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