Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,900,000. Harding paid $350,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $374,000; Building, $1,100,000 and Equipment, $726,000.What value will be reported for the building on the balance sheet?

Question

Quizplus · Accepted Answer

The total appraised value of the property is $2,200,000 ($374,000 + $1,100,000 + $726,000). The building's appraised value is $1,100,000. The cost allocated to the building is calculated as: ($1,100,000 / $2,200,000) * $1,900,000 = $950,000.

Harding Corporation Acquired Real Estate That Contained Land, Building and Equipment