Oakland Corp.purchased land and a building for a combined cost of $500,000.Oakland must

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The best choice is to allocate the $500,000 acquisition cost to separate Land and Buildings accounts based on their respective fair market values. This is because the cost of the land and building are likely to differ, and it is important to accurately reflect their values in the accounts. Allocating the cost based on fair market value is also required under generally accepted accounting principles (GAAP).