Question

Creel Company purchased four assets for $265,000. The following information is available concerning the assets purchased: Assigned Market Value $71,280 Asset A.. Asset B Asset C. Asset D $87,450 $37,100 $41, 580 Calculate the cost assigned to Asset B. 76,850

I'm not sure with my answer.

Answer 1

Total price paid $2,65,000 Cost Assigned to Total price % Market Value Cost Assigned Particulars $71,280 Asset A ? Asset B Asset C $87,450 $37,100 33.00% Asset D $41,580 14.00% Cost assigned to the asset is based on the ratio of Market Value 1 % of Asset D in total price = % of Asset D in total price 37100 265000 14.00% 2 Total Market value of all assets = 41580 0.14 Total Market value of all assets 3 Market Value of Asset C S2,97,000 Total market value x % of Cost to Total 297000 x 0.33 Market Value of Asset C 4 Market Value of Asset B S98,010 Total market value - market value of Asset A C.D 297000 (41580 98010 71280) Market Value of Asset B % of Asset B in Total Market Value = S86,130 86130 297000 % of Asset B in Total Market Value = 29.00% 5 Cost Assigned to Asset B Total Cost value x % of Cost to Total 265000 x 0.29 Cost Assigned to Asset B = S76,850.00 6 Cost Assigned to Asset A = Total Cost Cost Assigned to Asset B,C,D 265000 76850 87450 37100) $63,600.00 Cost Assigned to Asset A

Market Value Cost Assigned Particulars Asset A Asset B $71,280 $63,600 $86,130 S76,850 Asset C $98,010 $87,450 Asset D $41,580 $37,100 Total S2,97,000 S2,65,000

Cost Assigned to Asset B = $ 76,850