Answered

Pitney Co. purchased an office building, land, and furniture for $500,000 cash. The appraised value of the assets was as follows: Land $ 180,000 Building 300,000 Furniture 120,000 Total $ 600,000 Required Compute the amount to be recorded on the books for each asset. Record the purchase in a horizontal statements model.

Answer :

abiolataiwo2015

Answer:

1.Allocated cost

Land 150,000

Building 250,000

Furniture 100,000

Total 500,000

2.Net income cash flow -500,000 IA

Explanation:

1.

Allocated cost

Land =500,000*180,000/600,000=150,000

Building =500,000*300,000/600,000=250,000

Furniture =500,000*120,000/600,000=100,000

Allocated cost

Land 150,000

Building 250,000

Furniture 100,000

Total 500,000

2.

Cash -500,000

Land 150,000

Building 250,000

Furniture 100,000

Net income cash flow -500,000 IA

Tundexi

The total allocated cost equals $500,000 and the Net income cash flow equals -$500,000 IA.

What are the Allocated cost?

Land = $500,000*$180,000/$600,000

Land = $150,000

Building = $500,000*$300,000/$600,000

Building = $250,000

Furniture = $500,000*120,000/600,000

Furniture = $100,000

Total = $150,000 + $250,000 + $100,000

Total = $500,000

Net income cash flow = Cash + Land + Building + Furniture

Net income cash flow = -500,000 + 150,000 + 250,000 + 100,000

Net income cash flow = -$500,000 IA

Read more about Allocated cost

brainly.com/question/15739613

Other Questions