The portion of a group purchase of land and building for $1,302,000 allocated to land,when the land is appraised at $340,000 and the building on the land is appraised at $1,020,000,is
A)$996,500.
B)$325,500.
C)$345,500.
D)$976,500.

Question

Quizplus · Accepted Answer

The portion allocated to land can be found using the ratio of the appraised values of the land and building:
Portion allocated to land = Total Purchase Price x (Appraised value of land / (Appraised value of land + Appraised value of building))
= $1,302,000 x ($340,000 / ($340,000 + $1,020,000))
= $1,302,000 x (0.25)
= $325,500

Therefore, the answer is B) $325,500, which is the portion of the purchase price allocated to land.

The Portion of a Group Purchase of Land and Building