Question

Bailey Company paid $179,300 for land and a building. An independent appraiser provided these fair value estimates: land $93,300, and building $123,900.

The cost that will be allocated to the building will be $________

Answer 1

The cost that will be allocated to the building will be $102,280.25 or 102,280

Working

	Land	Building	Equipment	Total
Market value	$      93,300.00	$      1,23,900.00		$    2,17,200.00
Lumpsum amount paid				$    1,79,300.00
Allocation of lumpsum amount in ratio of Market value	$      77,019.75	$      1,02,280.25	$                          -	$    1,79,300.00