When plant assets are purchased as a group in a single transaction for a lump-sum price,the cost of the purchase is allocated among the different types of assets acquired based on their relative market (or appraised)values.

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This is known as the allocation of purchase cost method, which is used to distribute the total cost of a lump-sum purchase among the different assets acquired based on their relative values.

When Plant Assets Are Purchased as a Group in a Single