Question

A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $55,500; the land at $50,200, and the parking lot at $19,300. Land should be recorded in the accounting records with an allocated cost of: Multiple Choice $50,200. $46,160. $40,160. $0. $100,000.

Answer 1

$40,160.

Step-by-step explanation:

Total appraisal value = $55,500 + $50,200 + $19,300 = $125,000

Weight of land in the appraisal value = $50,200 ÷ $125,000 = 0.4016, or 40.16%

Amount to include in the accounting record = $100,000 × 40.16% = $40,160