Question

Rodriguez Company pays $358,020 for real estate with land, land improvements, and a building. Land is appraised at $193,500; land improvements are appraised at $64,500; and a building is appraised at $172,000. Required: 1. Allocate the total cost among the three assets. 2. Prepare the journal entry to record the purchase. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Allocate the total cost among the three assets. (Round your "Apportioned Cost" answers to 2 decimal places.) Appraised Value Percent of Total Appraised Value x Total Cost of Acquisition = Apportioned Cost $ Land Land improvements Building Totals 193,500 64,500 172,000 430,000 45% 15% 40% 100% | $ $ 0.00 (Required 1 Required 2 >

Answer 1

1. Allocation of total cost among the three assets:-
Date	Appraised Value	Percent of Total Appraised value	×	Total Cost of Acquisition	=	Apportioned Cost
a	b	c =(b/430000)*100		d		e =c*
Land	$     193,500	45%	×	358020	=	$161,109.00
Land Improvements	$       64,500	15%	×	358020	=	$53,703.00
Building	$     172,000	40%	×	358020	=	$143,208.00
Totals	$     430,000	100%				$358,020.00

2. Journal entry
Transaction	General Journal			Debit	Credit
1	Land			$161,109
	Land Improvements			$53,703
	Building			$143,208
	Cash				$358,020
	(To record the purchase)

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