A company purchased property for $100,000. The property included a building, a parking lot, and land. The building was appraised at $62,000; the land at $35,000, and the parking lot at $18,000. Land should be recorded in the accounting records with an allocated cost of:

Question

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The total appraised value is $115,000 ($62,000 + $35,000 + $18,000). The land's proportion of the total appraised value is $35,000/$115,000. The allocated cost is this proportion multiplied by the purchase price: ($35,000/$115,000) * $100,000 = $30,435.

A Company Purchased Property for $100,000