Answer: $122,277
Step-by-step explanation:
The cost that should be allocated to the land should be calculated thus:
Closing cost will be:
= 450,000 + 25,000
= 475,000
Total value of assets will be:
= Value of land + Value of building + Value of equipment
= 130,000 + 325,000 + 50,000
= 505,000
Therefore, cost allocated to land will be:
= (Total payment made x Value of land) / Total value of all assets
= (475,000 x 130,000) / 505,000
= 122,277