Question

Manning Company purchased a factory for $120,000. The factory included land, a building, and equipment. The land contributes 40.8%, the building contributes 49.6%, and the equipment contributes 9.6% of the factory’s value. How much of the cost should be assigned to the building?

Answer 1

Answer:

$59,520

Explanation:

Data provided in the question:

Purchasing cost of the company = $120,000

Particular             Contribution

Land                           40.8%

Building                     49.6%

Equipment                 9.6%

Now,

The cost that should be assigned to the building

= Purchasing cost of the company × Percentage Contribution of Building

= $120,000 × 49.6%

= $59,520