Capitol Construction Company made a basket purchase of three items. Item X was appraised at $55,000; item Y was appraised at $65,000 and item Z was appraised at $40,000. The purchase price was $125,000. The amount at which item Z should be recorded (rounded to the nearest dollar)is: (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The total appraised value of the three items is $160,000 (55,000+65,000+40,000). The percentage of the total appraised value that item Z represents is 25% ($40,000/$160,000). Therefore, the cost allocated to item Z would also be 25% of the purchase price of $125,000, which is $31,250.

Capitol Construction Company Made a Basket Purchase of Three Items