D2. Current Attempt in ProgressWildhorse Flight Academy acquired a new site for its training operations. The company was able to find a small unused airport with anupdated runway and hangar that could be used to accommodate a flight simulator, small aircraft, and classrooms. The location wasideal as it was close to the city centre with a large population base from which to attract students. Wildhorse paid $6.50 million toacquire the site. Prior to providing financing for the purchase, the bank required that an appraisal be completed of the property. Theevaluation appraisal report came back with the following estimated market values: land $3,451,250, building $2,572,750, and landimprovements $251,000. Wildhorse management explained, to the bank's satisfaction, that it paid the $225,000 premium because ofthe property's proximity to the city centre and access to a large population base from which to draw students.(a1)Allocate the $6.50-million purchase price to the land, building, and land improvements.LandBuildingto.$Allocated cost

Land is generally considered to have an indefinite life and is not subject to depreciation.…

Answered: Wildhorse Flight Academy acquired a new…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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