Answered

Rodriguez Company pays $352,755 for real estate with land, land improvements, and a building. Land is appraised at $192,000; land improvements are appraised at $72,000; and a building is appraised at $216,000. Required: 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase.

Answer :

Karabo99

Answer and Explanation:

                                       Appraised value    Percent of Total Appraised  

1. Land                              $192,000                       45%

2. Land Improvements      $72,000                        10%

3. Building                      $216,000                        45%

Total                              $440000                       100%  

X Total cost of acquisition    = Apportioned cost

1.       $352,755                     $158,739.75

2.      $352,755                          $35,275.5

3.      $352,755                     $158,739.75

total                                             $352,755

general journal                            debit                  credit

building                                        158,739.75

land                                               35,275.5  

land improvements                      158739.75

cash                                                                         352,755

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