A company purchased property for $100,000. The property included a building, equipment and land. The building was appraised at $62,000, the land at $45,000, and the equipment at $18,000. What is the amount of cost to be allocated to the building in the accounting records?
A) $0
B) $49,600
C) C)$62,000
D) $100,000

Question

Quizplus · Accepted Answer

The cost to be allocated to the building would be the appraised value of the building, which is $62,000. This is because when recording the transaction in the accounting records, each asset would be recorded at its fair market value or appraised value, not the total cost of the property. Therefore, the cost to be allocated to the building would be $62,000.

A Company Purchased Property for $100,000