Assets acquired in a basket purchase are to be allocated a portion of the total price based on their respective:
A)fair market values.
B)book values.
C)present values.
D)assessed values.

Question

Quizplus · Accepted Answer

Assets acquired in a basket purchase should generally be allocated a portion of the total price based on their respective fair market values. This method of allocation is considered to be the most reliable measure of the relative value of the different assets being acquired. Allocating the purchase price based on book values, present values, or assessed values is generally not considered to be as reliable or accurate.

Assets Acquired in a Basket Purchase Are to Be Allocated