SportsWorld paid $140,000 for a property.The property included land appraised at $67,500,land improvements appraised at $25,000,and a building appraised at $55,500.What should be the allocation of costs in the accounting records (round calculations to 3 decimals)?

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Quizplus · Accepted Answer

The allocation of costs should be based on the appraised values of the land, land improvements, and building. The total appraised value is $67,500 + $25,000 + $55,500 = $148,000. The allocation of costs should be:Land: $67,500 / $148,000 * $140,000 = $63,840Land improvements: $25,000 / $148,000 * $140,000 = $23,660Building: $55,500 / $148,000 * $140,000 = $52,500

SportsWorld Paid $140,000 for a Property