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)$62,000.
D)$100,000

Question

Quizplus · Accepted Answer

The cost is allocated based on the appraised values. The building's appraised value is $62,000 out of a total appraised value of $125,000 ($62,000 + $45,000 + $18,000). The allocation for the building is ($62,000/$125,000) * $100,000 = $49,600.

A Company Purchased Property for $100,000