Metropolitan Masonry made a basket purchase of three items. Item X was appraised at $39,000; item Y was appraised at $57,000 and item Z was appraised at $61,000. The purchase price was $129,000. The amount at which item Y should be recorded is:
A)($57,000/$129,000)× $157,000.
B)($57,000/$157,000)× $129,000.
C)($57,000/$100,000)× $157,000.
D)($57,000/$100,000)× $129,000.

Question

Quizplus · Accepted Answer

To determine the amount at which item Y should be recorded, we need to use the proportion:

appraised value of item Y / total appraised value = purchase price / total purchase price

Substituting the given values, we get:

57,000 / (39,000 + 57,000 + 61,000) = purchase price / 129,000

Solving for purchase price, we get:

purchase price = (57,000 / 157,000) × 129,000 = $46,024.78

Therefore, item Y should be recorded at $46,024.78, which is closest to answer choice B.

Metropolitan Masonry Made a Basket Purchase of Three Items