Alpha Company has three components in their lease agreement: the building, the equipment and the maintenance service. Total consideration in the contract is $500,000 per year. Alpha Company has identified the following standalone prices:
$$\begin{array} { | l | r | }
\hline { \text { Corapanent } } & \text { Stondalane Prire } \
\hline \text { Building } & \$ 400,000 \
\hline \text { Equipment } & 100,000 \
\hline \text { Maintenance/Service } & \$ 50,000 \
\hline \text { Total } &\$ 550,000 \
\hline
\end{array}$$
Calculate the percentages and allocate the consideration to each component.

Question

Alpha Company has three components in their lease agreement: the building, the equipment and the maintenance service. Total consideration in the contract is $500,000 per year. Alpha Company has identified the following standalone prices:
 $$\begin{array} { | l | r | } 
\hline { \text { Corapanent } } & \text { Stondalane Prire } \
\hline \text { Building } & \$ 400,000 \
\hline \text { Equipment } & 100,000 \
\hline \text { Maintenance/Service } & \$ 50,000 \
\hline \text { Total } &\$ 550,000 \
\hline
\end{array}$$ 
Calculate the percentages and allocate the consideration to each component.

Quizplus · Accepted Answer

The Answer of Alpha Company has three components in their lease agreement: the building, the equipment and the maintenance service. Total consideration in the contract is $500,000 per year. Alpha Company has identified the following standalone prices:
 $$\begin{array} { | l | r | } 
\hline { \text { Corapanent } } & \text { Stondalane Prire } \
\hline \text { Building } & \$ 400,000 \
\hline \text { Equipment } & 100,000 \
\hline \text { Maintenance/Service } & \$ 50,000 \
\hline \text { Total } &\$ 550,000 \
\hline
\end{array}$$ 
Calculate the percentages and allocate the consideration to each component.

Alpha Company Has Three Components in Their Lease Agreement: the Building