The Loft Corporation purchased land and a building for $700,000.An appraisal indicates that the land's value is $400,000 and the building's value is $350,000.The amount that The Loft Corporation should debit to the Building account is:

Question

Quizplus · Accepted Answer

The total appraised value is $750,000 ($400,000 for land + $350,000 for building). The building's appraised value is 46.67% of the total appraised value ($350,000/$750,000). Therefore, the amount to debit to the Building account is 46.67% of the purchase price: $700,000 * 46.67% = $326,667.

The Loft Corporation Purchased Land and a Building for $700,000