### Exercise 7-3A: Allocate costs in a basket purchase (LO7-1)**Scenario:**Red Rock Bakery purchases land, building, and equipment for a single purchase price of $560,000. - Estimated fair values: - Land: $231,000 - Building: $363,000 - Equipment: $56,000The total estimated fair value is $650,000.**Required:**Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment.**Table Structure:**1. **Estimated Fair Value** - Land - Building - Equipment - Total2. **Allocation Percentage** - Represents the proportion of the purchase price to be allocated to each asset based on its estimated fair value.3. **Amount of Basket Purchase** - The actual amount allocated to each asset from the total purchase price of $560,000.4. **Recorded Amount** - The final amount recorded for each asset in the company accounts. Note: The table contains placeholders for entering dollar amounts and percentages, which calculate the allocation of the purchase price among the assets.

Exercise 7-3A Allocate costs in a basket purchase (L07-1) Red Rock Bakery purchases land, building, and equipment for a single purchase price of $560,000. However, the estimated fair valu of the land, building, and equipment are $231,000, $363,000, and $66,000, respectively, for a total estimated fair value of $660,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment. Allocation Percentage Amount of Basket Purchase Recorded Amount Estimated Fair Value Land Building Equipment % Total

Exercise 7-3A Allocate costs in a basket purchase (L07-1) Red Rock Bakery purchases land, building, and equipment for a single purchase price of $560,000. However, the estimated fair valu of the land, building, and equipment are $231,000, $363,000, and $66,000, respectively, for a total estimated fair value of $660,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment. Allocation Percentage Amount of Basket Purchase Recorded Amount Estimated Fair Value Land Building Equipment % Total

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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