Radner Shipping purchased a truck and a trailer for $54,000. An appraisal has set the fair market values of the truck and the trailer at $19,000 and $38,000, respectively. At what amount should Radner record the truck?

Question

Quizplus · Accepted Answer

The truck should be recorded at its proportionate share of the total purchase price based on its fair market value. The total fair market value is $57,000 ($19,000 for the truck + $38,000 for the trailer). The truck's proportionate share is $19,000/$57,000 of the total purchase price of $54,000, which equals $18,000.

Radner Shipping Purchased a Truck and a Trailer for $54,000