Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000. Required: Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000. Required: Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000.
Required:
Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
Transcribed Image Text:Red River Bakery purchases land, building, and equipment for a single purchase price of $260,000. However, the estimated fair values
of the land, building, and equipment are $126,000, $198,000, and $36,000, respectively, for a total estimated fair value of $360,000.
Required:
Determine the amounts Red River should record in the separate accounts for the land, the building, and the equipment.
Estimated Fair Value
Allocation
Percentage
Amount of Basket
Purchase
Recorded
Amount
Land
Building
Equipment
%
%
%
Total
$
0
$
0
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