Harbour Inc basket purchase of land, building, equipment: allocate purchase price
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HARBOUR INC ACQUIRED LAND, BUILDING & EQUIPMENT AT A LUMP-SUM PRICE OF $1,840,000. AN APPRAISAL OF THE ASSETS AT THE TIME OF ACQUISITION DISCLOSED THE FOLLOWING VALUES:
LAND 500,000
BUILDING 1,200,000
EQUIPMENT 400,000
DETERMINE THE COST TO BE ASSIGNED TO EACH ASSET.
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Solution Summary
The solution explains how to allocate a basket purchase of assets and shows the calculations.
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HARBOUR INC ACQUIRED LAND, BUILDING & EQUIPMENT AT A LUMP-SUM PRICE OF $1,840,000. AN APPRAISAL OF THE ASSETS AT THE TIME OF ACQUISITION DISCLOSED THE FOLLOWING VALUES:
LAND 500,000
BUILDING 1,200,000
EQUIPMENT 400,000
DETERMINE THE COST TO BE ASSIGNED TO EACH ASSET.
Response:
What is the total appraisal value of the assets? If we add up the appraisal of the land, the building, and the ...
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