Chico Company paid $950,000 for a basket purchase that included office furniture, a building and land....

Chico Company paid $950,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Office furniture $190,000; Building $740,000, Land $132,000. Based on this information, the amount of cost that would be allocated to the office furniture is closest to: (Round your intermediate percentages to 2 decimal places: ie 0.054231 = 5.42%.):

Solutions

Expert Solution

Particulars	Value	Percentage
Office Furniture	$1,90,000	17.89%
Buildings	$7,40,000	69.68%
Land	$1,32,000	12.43%
Total	$10,62,000	100.00%

Amount to be allocated to Office Furniture in Basket Purchase Price = $950,000 * 17.89% = $ 169,955

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

On January 1, 2016, Phillips Company made a basket purchase including land, a building and equipment...

On January 1, 2016, Phillips Company made a basket purchase including land, a building and equipment for $830,000. The appraised values of the assets are $54,000 for the land, $820,000 for the building and $136,000 for equipment. Phillips uses the double declining balance method of depreciation for the equipment which is estimated to have a useful life of four years and a salvage value of $10,000. The depreciation expense for 2016 for the equipment is $68,000. $34,000. $27,950. $55,901.

On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....

On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment. The market value of these assets on that date were: land $68,000; building $220,000; equipment $112,000. The equipment was assigned a useful life of 15 years and a $6,000 residual value. The equipment will be depreciated using the straight-line method. On November 30, 2023, XYZ Company sold the equipment for $39,300 cash. Calculate the amount of the loss recorded on the sale of the...

On June 1, 2016, XYZ Company paid $375,000 to purchase land, a building, and some equipment....

On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. The market...

On January 1, 2018, XYZ Company paid $380,000 to purchase land, building, and equipment. The market values of these assets on that date were: land $60,000; building $200,000; equipment $140,000. Before the property could be used, XYZ Company had to spend $5,000 to put the equipment in working order. The building was assigned a useful life of 20 years with a $4,000 salvage value. The building will be depreciated using the straight-line method. On October 1, 2028, XYZ Company sold...

IBM acquired land and a building for a purchase price of $2,290,000. Before purchasing, they paid...

IBM acquired land and a building for a purchase price of $2,290,000. Before purchasing, they paid $30,000 for an appraisal that determined the fair value of the land as $756,000 and the building as $1,944,000. Additionally, IBM incurred a closing cost of $180,000 to complete the transfer. Two days after completion of the transfer, the building had a leak that required $75,000 worth of damage to be repaired. What is the acquisition cost that would be capitalized, individually, to the...

Company purchased a property that included both land and a building for $200,000. Company hired an appraiser...

Company purchased a property that included both land and a building for $200,000. Company hired an appraiser who determined that the market value of the land was $140,000 and the market value of the building was $50,000. At what amount should Company record the building and land cost? (Lump Sum Purchase)

In 2017, Nobles Company paid $975,000 for real estate that included a tract of land on...

In 2017, Nobles Company paid $975,000 for real estate that included a tract of land on which two buildings were located. The plan was to demolish Building A, and build a new store in its place. Building B was to be used as a company office, and was appraised to have a value of $315,000, with a useful life of 20 years, and a $45,000 scrap value. A lighted parking lot near Building B had improvements valued at $105,000 that...

Q2. XYZ company is considering building a new office building. XYZ already owns a plot of land...

Q2. XYZ company is considering building a new office building. XYZ already owns a plot of land worth $2M and has paid an architectural firm $300k for building designs. Construction cost for the building is $1M. Projected rent income from the building is $400k/year and interest expense will be $300k/year. After three years XYZ expects to sell the building and land for $2.5M. If XYZ has a required rate of return of 10%, what is the NPV and IRR of building the office building? Please...

1. Millburn Company has acquired a property that included both land and a building for $530,000....

1. Millburn Company has acquired a property that included both land and a building for $530,000. The company hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $480,000. Prepare the journal entry to record the purchase of these assets. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) 2. Calculate the depreciation expense using the straight-line and units-of-production methods for all...

Wildhorse Company purchased land and a building on April 1, 2019, for $369,600. The company paid...

Wildhorse Company purchased land and a building on April 1, 2019, for $369,600. The company paid $110,400 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $145,000 and the building, $224,600. The building was estimated to have a 25-year useful life with a $35,000 residual value. The company has a December 31 year end, prepares adjusting entries annually, and uses the straight-line method for buildings; depreciation is...

Subjects