FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Allocation of Package Purchase Price
Tamock Company purchased a plant from one of its suppliers. The $965,000 purchase price included the land, a building, and factory machinery. Tamock also paid $5,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased:
Property |
Assessed Value |
---|---|
Land | $126,000 |
Building | 486,000 |
Machinery | 288,000 |
Total | $900,000 |
Using the assessed value as a guide, allocate the total purchase price of the plant to the land, building, and machinery accounts in Tamock Company’s records.
Asset |
Allocation of Purchase Price |
---|---|
Land | Answer |
Building | Answer |
Machinery | Answer |
Total | Answer |
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