A company purchases a 19,320-square-foot building for $345,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 2,520 square feet, will be rented for $1.00 per square foot. Unit B contains 16,800 square feet and will be rented for $0.60 per square foot. How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation? Unit A Unit B Totals Rental value $ $ Percent of rental value Numerator Denominator % of Mkt Value 2,520 $ 2,520 $ 12,600 12,600 10,080 12,600 10,080 0.00% Joint Cost Allocated cost
A company purchases a 19,320-square-foot building for $345,000. The building has two separate rental units. Unit A, which has the desirable location on the corner and contains 2,520 square feet, will be rented for $1.00 per square foot. Unit B contains 16,800 square feet and will be rented for $0.60 per square foot. How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation? Unit A Unit B Totals Rental value $ $ Percent of rental value Numerator Denominator % of Mkt Value 2,520 $ 2,520 $ 12,600 12,600 10,080 12,600 10,080 0.00% Joint Cost Allocated cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rahul bhaliya
Transcribed Image Text:QS 22-21A (Algo) Joint cost allocation LO C2
A company purchases a 19,320-square-foot building for $345,000. The building has two separate rental units. Unit A, which has the
desirable location on the corner and contains 2,520 square feet, will be rented for $1.00 per square foot. Unit B contains 16,800
square feet and will be rented for $0.60 per square foot.
How much of the joint cost should be allocated to Unit A and to Unit B using the value basis of allocation?
Unit A
Unit B
Totals
Rental value
$
$
Percent of rental value
Numerator Denominator % of Mkt Value
2,520 $ 2,520 $ 12,600
10,080
10,080
12,600
12,600
0.00%
Joint Cost
Allocated
cost
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