For $11,100,000, Neptune, Inc. purchased another company's land, building, and equipment. Independent appraisals indicate the values of these assets as follows: land, $1,830,000; building, $7,320,000; and equipment, $3,050,000.
How much should be recorded as the acquisition cost of each asset?

Question

Quizplus · Accepted Answer

Total appraised value: $1,830,000 + $7,320,000 + $3,050,000 = $12,200,000
Land: ($1,830,000 / $12,200,000) x ($11,100,000) = $1,665,000
Building: ($7,320,000 / $12,200,000) ($11,100,000) = $6,660,000
Equipment: ($3,050,000 / $12,200,000) ($11,100,000) = $2,775,000