Galford Company purchased real estate for $480,000, plus closing costs and fees of $60,000. The property which included land, building, and land improvements was appraised for $600,000, as follows:
Building $\quad $ $\quad $ $\quad $ $300,000
Land$\quad $ $\quad $ $\quad $ $\quad $ $\quad $180,000
Land improvements $\quad $120,000
The asset Building should be reported on Galford's balance sheet at a value of

Question

Galford Company purchased real estate for $480,000, plus closing costs and fees of $60,000. The property which included land, building, and land improvements was appraised for $600,000, as follows: 
Building $\quad $   $\quad $ $\quad $ $300,000
Land$\quad $ $\quad $  $\quad $ $\quad $ $\quad $180,000
Land improvements  $\quad $120,000
The asset Building should be reported on Galford's balance sheet at a value of

Quizplus · Accepted Answer

The total purchase price ($480,000) plus closing costs and fees ($60,000) equals $540,000. The appraised values total $600,000. The building's appraised value ($300,000) represents 50% of the total appraised value. Therefore, 50% of the total cost ($540,000) is allocated to the building, resulting in a reported value of $270,000.

Galford Company Purchased Real Estate for $480,000, Plus Closing Costs \quad

Galford Company Purchased Real Estate for $480,000, Plus Closing Costs $\quad$