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Pinewood Company purchased two buildings on four acres of land. The lump-sum purchase price was $1,400,000. According to inde

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Answer #1
WORKING NOTES:
CALCULATION OF PROPORTIONATE % OF EACH ASSETS
FAIR VALUE OF THE ASSETS Fair Value Proporation of each assets
Land $6,75,000.00 45%
Building A $3,00,000.00 20%
Building B $5,25,000.00 35%
Total $15,00,000.00 100%
SOLUTION:
CALCULATION OF INITIAL VALUATION OF BUILDING AND LAND
Lumpsum Price X by Proportion % Purchase Value
Land $14,00,000 45% $6,30,000
Building A $14,00,000 20% $2,80,000
Building B $14,00,000 35% $4,90,000
Total $14,00,000
Answer =
Land $6,30,000
Building A $2,80,000
Building B $4,90,000
Total $14,00,000
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