Land and a building on the land are purchased for $672,000.The appraised values of the land and building are $120,000 and $600,000,respectively.The cost allocated to the building should be

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The cost allocated to the building is based on the proportion of its appraised value to the total appraised value of both the land and building. The total appraised value is $720,000 ($120,000 for land + $600,000 for building). The building's proportion is $600,000/$720,000 = 5/6. Therefore, the cost allocated to the building is 5/6 of $672,000, which is $560,000.

Land and a Building on the Land Are Purchased for $672,000.The