Question

On April 1, Sunland Company purchased for $1620000 a tract of land on which a warehouse and office building was located. The following data were collected concerning the property: Current Assessed Valuation Vendor's Original Cost Land $620000 $570000 Warehouse 390000 360000 Office building 790000 690000 $1800000 $1620000 What are the appropriate amounts that Sunland should record for the land, warehouse, and office building, respectively

Answer 1

Land $558,000

Warehouse $351,000

Office building $711,000

Step-by-step explanation:

Calculation to determine the appropriate amounts that Sunland should record for the land, warehouse, and office building, respectively

ALLOCATED COST

LAND $620000/ $1,80,0000*$1,620,000=$558,000

WAREHOUSE 390000/$1800000*$1620000=$351,000

OFFICE BUILDING 790000/$1800000*$1620000=$711,000

Total $1,800,000 $1,620,000

Therefore the appropriate amounts that Sunland should record are :

Land $558,000

Warehouse $351,000

Office building $711,000