Big River Rafting pays $310,000 plus $15,000 in closing costs to buy out a competitor. The real estate consists of land appraised at $105,000, a building appraised at $210,000, and equipment appraised at $35,000. Compute the cost that should be allocated to the building.

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The total appraised value is $350,000 ($105,000 for land + $210,000 for building + $35,000 for equipment). The building's appraised value is 60% of the total appraised value ($210,000/$350,000). The total cost including closing costs is $325,000 ($310,000 + $15,000). Allocating 60% of $325,000 to the building gives $195,000.

Big River Rafting Pays $310,000 Plus $15,000 in Closing Costs