Question

Anderson Corporation has purchased a group of assets for $16,600.

The assets and their relative market values are listed below.
Land 6,500
Equipment 2,400
Building 3,400
Which of the following amounts would be debited to the Land? account? (Round any intermediate calculations to two decimal? places, and your final answer to the nearest? dollar.)A.$ 3 comma 320$3,320B.$ 4 comma 100$4,100C.$ 8 comma 798$8,798
D. $ 4 comma 648

Answer 1

C.$ 8 comma 798$8,798

Step-by-step explanation:

Given,

Purchase value = $16,600

Considering the relative values

Relative value of land = $6,500

Total relative value = 6500 + 2400 + 3400

= $12,300

Using the relative value to allocate the purchased value of the land

Purchased cost of land = (6500/12300) × 16,600

= 0.53 × 16,600

= $8,798

The amount that would be debited to the Land is $8,798 Option C