On April 1, 2020, Renfro Corporation purchased land, a building, and some equipm
ID: 2557101 • Letter: O
Question
On April 1, 2020, Renfro Corporation purchased land, a building, and some equipment for $633,000. The following information is available concerning the property purchased: Current Market Value Land ....................... 148,350 Building ................... 374,100 Equipment .................. ? Before the property could be used, Renfro had to spend $12,660 to renovate the building and $7,410 to put the equipment in working order. The cost that was assigned to the building totaled $379,800. Calculate the cost assigned to the equipment.
Explanation / Answer
Cost of Building $379800 = $374,100/ Total market value of the assets purchased x $633000 - $12660 Total market value of the assets purchased $603,387.10 Market value of Equipment = $603,387.10 - 148350 - 374100 $80,937.10 Cost assigned to the equipment = 80937.10 + 7410 $88,347.10