Land, buildings and equipment are acquired for a lump sum of $850,000. The market values of the three assets are, respectively, $250,000, $480,000 and $180,000. What is the cost assigned to the equipment?
A) $150,132
B) $168,132
C) $180,000
D) $209,590

Question

Quizplus · Accepted Answer

First, we need to calculate the total market value of the assets: $250,000 + $480,000 + $180,000 = $910,000
Then, we can use the ratio of the market value of each asset to calculate the cost assigned to the equipment: 
$180,000 / $910,000 x $850,000 = $168,131.87. 
Therefore, the cost assigned to the equipment is $168,132 (rounded to the nearest dollar). So, the correct choice is B.

Land, Buildings and Equipment Are Acquired for a Lump Sum