Question

A company purchased property for $100,000. The property included a building, equipment and land. The building was appraised at $62,000, the land at $45,000, and the equipment at $18,000 for a total appraised value of $125,000. What is the amount of cost to be allocated to the building in the accounting records?

$0

$49,600

$62,000

$100,000

A company purchased office equipment for $24,500 and paid $1,470 in sales tax, $550 for installation, $3,200 for a needed adjustment to the equipment, and $2,600 for supplies that will be used for periodic routine maintenance. How should the company record this transaction?

Debit Equipment $24,500, debit Repairs and Maintenance Expense for $5,220, debit Supplies for $2,600, and credit Cash for $32,320

Debit Equipment for $29,720, debit Supplies for $2,600, and credit Cash for $32,320

Debit Equipment for $25,970, debit Repairs and Maintenance Expense $3,750, debit Supplies for $2,600, and credit Cash for $32,320

Debit Equipment and credit Cash for $32,320

Answer 1

	Appraised value	Cost booked
Building	$                      62,000	$        49,600
Equipment	$                      45,000	$        36,000
Land	$                      18,000	$        14,400
	$                    125,000	$     100,000
Cost assigned to building is $49,600

Second Part

Second option is correct.

Equipment cost, sales tax, installation, adjustment should be debited to equipment and rest to supplies.