Question

Bartman, Inc., purchased a tract of land, a small office building, and some equipment for $1,900,000. The appraised value of the land was $1,380,000, the building was $575,000, and the equipment $345,000. What amount is recorded in Bartman’s accounting records for the land?

Answer 1

Answer:

$1,140,000

Explanation:

For computing the amount of land that would be recorded, first we have to find out the total appraisal value which is shown below:

= Appraised value of the land + Appraised value of the building + Appraised value of the equipment

= $1,380,000 + $575,000 + $345,000

= $2,300,000

And, the total cost is $1,900,000

So, the record value of the land would be

= (Total cost ÷ total appraisal value)× appraisal value of the land

= ($1,900,000 ÷ $2,300,000) × $1,380,000

= $1,140,000