Renfro Corporation Property Acquisition
What are the amounts that Renfro should record for the land, warehouse, and office building, respectively?
Renfro Corporation should record the following amounts for the property acquisition: - Land = $255,000 - Warehouse = $170,000 - Office building = $340,000
Explanation:
Purchase price = $765,000
Appraised values of:
- Land = $300,000
- Warehouse = $200,000
- Office building = $400,000
Total appraised value = $900,000
Apportionment of Purchase Price:Land = $255,000 ($765,000/$900,000 * $300,000)
Warehouse = $170,000 ($765,000/$900,000 * $200,000)
Office building = $340,000 ($765,000/$900,000 * $400,000)
Total = $765,000