Laramie Co.paid $800,000 for a purchase that included land,building,and office furniture.An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Land,$100,000,Building,$740,000,and Office Furniture,$160,000.Based on this information the cost that would be allocated to the land is:

Question

Quizplus · Accepted Answer

The total appraised value is $1,000,000 ($100,000 + $740,000 + $160,000). The land's proportion of the total appraised value is 10% ($100,000/$1,000,000). Therefore, 10% of the total purchase price of $800,000 is allocated to the land, which is $80,000.