QS 24-19C Joint cost allocation LO C3 A company purchases a 11,440-square-foot commercial building for $435,000 and spends an additional $56,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 2,340 square feet, will be rented for $1.50 per square foot. Unit B contains 9,100 square feet and will be rented for $0.90 per square foot. How much of the joint cost should be assigned to Unit B using the value basis of allocation? X Answer is complete but not entirely correct. Market Value Percent of Market Value Joint Cost Apportioned Cost % of Mkt Value Numerator Denominator Unit $ 2,340 $ 3,150 $ 11,340 X 40.00% X x $ 491,000 $ 196,400 Unit B 9,100 X 11,340 X 60.00% X x $ 491,000 8,190 294,600 Totals $ 11,440 100.00% 491,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
100%
QS 24-19C Joint cost allocation LO C3
A company purchases a 11,440-square-foot commercial building for $435,000 and spends an additional $56,000 to divide the space
into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 2,340 square
feet, will be rented for $1.50 per square foot. Unit B contains 9,100 square feet and will be rented for $0.90 per square foot.
How much of the joint cost should be assigned to Unit B using the value basis of allocation?
X Answer is complete but not entirely correct.
Market
Joint
Percent of Market Value
Apportioned
Cost
Value
Cost
% of Mkt
Numerator
Denominator
Value
Unit
2,340 X $
3,150 X $
11,340 X
40.00% X X
$ 491,000
$
196,400 X
A
Unit
9,100 X
8,190
11,340 X
60.00%
$ 491,000
294,600
Totals
11,440
100.00%
491,000
II
Transcribed Image Text:QS 24-19C Joint cost allocation LO C3 A company purchases a 11,440-square-foot commercial building for $435,000 and spends an additional $56,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 2,340 square feet, will be rented for $1.50 per square foot. Unit B contains 9,100 square feet and will be rented for $0.90 per square foot. How much of the joint cost should be assigned to Unit B using the value basis of allocation? X Answer is complete but not entirely correct. Market Joint Percent of Market Value Apportioned Cost Value Cost % of Mkt Numerator Denominator Value Unit 2,340 X $ 3,150 X $ 11,340 X 40.00% X X $ 491,000 $ 196,400 X A Unit 9,100 X 8,190 11,340 X 60.00% $ 491,000 294,600 Totals 11,440 100.00% 491,000 II
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education