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Exercise 7-3 (Algo) Allocate costs in a basket purchase (LO7-1) Red Cedar Bakery purchases land, building, and equipment for a single purchase price of $280,000. However, the estimated values of the land, building, and equipment are $114,000, $209,000, and $57,000, respectively, for a total estimated fair value

Exercise 7-3 (Algo) Allocate costs in a basket purchase (LO7-1) Red Cedar Bakery purchases land, building, and equipment for a single purchase price of $280,000. However, the estimated values of the land, building, and equipment are $114,000, $209,000, and $57,000, respectively, for a total estimated fair value

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 7-3 (Algo) Allocate costs in a basket purchase (LO7-1) Red Cedar Bakery purchases land, building, and equipment for a single purchase price of $280,000. However, the estimated fair values of the land, building, and equipment are $114,000, $209,000, and $57,000, respectively, for a total estimated fair value of $380,000. Required: Determine the amounts Red Cedar should record in the separate accounts for the land, the building, and the equipment. Land Building Equipment Total Estimated Fair Value Allocation Percentage % %* % Amount of Basket Purchase Recorded Amount
Transcribed Image Text:Exercise 7-3 (Algo) Allocate costs in a basket purchase (LO7-1) Red Cedar Bakery purchases land, building, and equipment for a single purchase price of $280,000. However, the estimated fair values of the land, building, and equipment are $114,000, $209,000, and $57,000, respectively, for a total estimated fair value of $380,000. Required: Determine the amounts Red Cedar should record in the separate accounts for the land, the building, and the equipment. Land Building Equipment Total Estimated Fair Value Allocation Percentage % %* % Amount of Basket Purchase Recorded Amount
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