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Homework answers / question archive / DEF Company bought a piece of land and building for P15,000,000
DEF Company bought a piece of land and building for P15,000,000. On the acquisition date, the land has a fair value of P6,000,000 and the office building of P12,000,000.
Compute how much should be recorded as Land?
Compute how much should be recorded as Building?
|
Asset |
Fair value |
Percentage of fair value |
Allocated cost |
|
Land |
6,000,000 |
6,000,000/18,000,000 = 33.3333333333% |
15,000,000 x 33.3333333333% = 5,000,000 |
|
Building |
12,000,000 |
12,000,000/18,000,000 = 66.6666666666% |
15,000,000 x 66.6666666666% = 10,000,000 |
|
Total |
18,000,000 |
100% |
15,000,000 |
Land = P5,000,000
Building = P10,000,000
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