Part 1: McCoy\'s Fish House purchases a tract of land and an existing building f
ID: 2566381 • Letter: P
Question
Part 1: McCoy's Fish House purchases a tract of land and an existing building for $820,000. The company plans to remove the old building and construct a new restaurant on the site. In addition purchase price, McCoy pays closing costs, including title insurance of $1,200. The company also pays $10,400 from previous years) paid by McCoy on behalf of the seller and $3,200 due for the current fiscal year after the purchase date. Shortly after closing, the down the old building and remove it from the site. McC the old building for $5,600 and pays an additional $11,300 to level the land. in property taxes, which includes $7.200 of back taxes (unpaid taxes company pays a contractor $41,000 to tear y is able to sell salvaged materials from Required: Determine the amount McCoy's Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.) 41.000 Total Costs of Land Part 2: Red Rock Bakery purchases land, building, and equipment for a single purchase price of $340,000. However, the estimated fair values of the land, buildings, and equipment are $132,000, $264,000, and $44,000, respectively, for a total estimated fair value of S440,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment Estimated Fair Allocation Amount of Basket Recorded Amount Purchase $340,000 340,000 340,000 Percentage %) ildi ng | 2.co Total 44O00OExplanation / Answer
Answer of Question 2 :-
Particulars Estimated Value Allocation Percentage Amount of Basket Purchase Recorded Amount Land $132000 30% $340000 102000 Building $264000 60% $340000 204000 Equipment $44000 10% $340000 34000 Total $440000 100% 340000