Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $2,090,000. Harding paid $595,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $629,000; Building, $1,870,000 and Equipment, $1,241,000.What value will be reported for the land on the balance sheet? (Round intermediate percentage values to a whole percentage.)

Question

Quizplus · Accepted Answer

The value reported for the land on the balance sheet will be the proportionate value of the land in relation to the appraisal value of the entire property.

Proportionate value of land = (Land appraisal value / Total appraisal value) * Cost
Proportionate value of land = ($629,000 / $3,740,000) * $2,090,000
Proportionate value of land = $355,300

Therefore, the value reported for the land on the balance sheet will be $355,300.

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