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Nair Company purchased land and a building for a total price of $15,600,000. Individually, the land...

Nair Company purchased land and a building for a total price of $15,600,000. Individually, the land was appraised at $2,520,000 and the building at $14,280,000. How much should be recorded as the acquisition cost of each asset?

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Homework Answers

Answer #1
  • Amount to be recorded for each asset

Land

$        2,340,000.00

Building

$       13,260,000.00

  • Working

Allocation of total cost

Appraised Value

Percent of Total Appraised Value

x

Total cost of Acquisition

Apportioned Cost

Land

$        2,520,000.00

15.00%

%

x

$15,600,000.00

$   2,340,000.00

Building

$       14,280,000.00

85.00%

%

x

$15,600,000.00

$ 13,260,000.00

Total

$       16,800,000.00

100.00%

%

$15,600,000.00

$ 15,600,000.00

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