The Oscar Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $180,000. At the time of acquisition, Oscar paid $12,000 to have the assets appraised. The appraisal disclosed the following values:

What cost should be assigned to the land, buildings, and equipment, respectively?

Question

The Oscar Corporation acquired land, buildings, and equipment from a bankrupt company at a lump-sum price of $180,000. At the time of acquisition, Oscar paid $12,000 to have the assets appraised. The appraisal disclosed the following values:

What cost should be assigned to the land, buildings, and equipment, respectively?

Quizplus · Accepted Answer

The cost assigned to the land should be based on its appraised value of $96,000. The cost assigned to the buildings should be based on their appraised value of $64,000. The cost assigned to the equipment should be based on its appraised value of $32,000. Therefore, the cost should be assigned as follows:

Land: $96,000 
Buildings: $64,000 
Equipment: $32,000

Option C is the only choice that matches these values.

The Oscar Corporation Acquired Land, Buildings, and Equipment from a Bankrupt