Question

Sheridan Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $371,700. The estimated fair values of the assets are land $70,800, building $259,600, and equipment $94,400. At what amounts should each of the three assets be recorded?

Answer 1

Land = $61,950

Building = $227,150

Equipment = $82,600

Step-by-step explanation:

Total Asset Fair Value = $70,800+$259,600+$94,400

Total Asset Fair Value = $424,800

Recorder Amount

Land = [$70,800/$424,800]$371,700

Land = $61,950

Building = [$259,600/$424,800]$371,700

Building = $227,150

Equipment = [$94,400/$424,800]$371,700

Equipment = $82,600