A company purchased property for $100,000.The property included a building,a parking lot,and land.The building was appraised at $62,000;the land at $35,000,and the parking lot at $18,000.Land should be recorded in the accounting records with an allocated cost of:
A)$0.
B)$30,435.
C)$35,000.
D)$46,087.
E)$100,000.

Question

Quizplus · Accepted Answer

The total appraised value is $115,000 ($62,000 + $35,000 + $18,000). The land's proportion of the total appraised value is $35,000/$115,000. The allocated cost for the land is this proportion multiplied by the purchase price: ($35,000/$115,000) * $100,000 = $30,435.

A Company Purchased Property for $100,000