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Homework answers / question archive / A company paid $150,000, plus 6% commission, and $4,000 in closing costs for a property

A company paid $150,000, plus 6% commission, and $4,000 in closing costs for a property

Accounting

A company paid $150,000, plus 6% commission, and $4,000 in closing costs for a property. The property included land appraised at $87,500, land improvements appraised at $35,000, and a building appraised at $52,500. What should be the allocation of this property’s of this property’s costs in the company’s accounting records?

    1. Land $75,000; Land Improvements, $30,000; Building, $45,000
    2. Land $75,000; Land Improvements, $30,800; Building, $46,200
    3. Land $81,500; Land Improvements, $32,600; Building, $48,900
    4. Land $79,500; Land Improvements, $32,600; Building, $47,700
    5. Land $87,500; Land Improvements, $35,000; Building, $52,500

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Answer:

c .

Step-by-Step explanation

Correct option is "C"

?

Company paid = $150000 + (.06 * $150000) + $4000

                          = $163000

Therefore land $81500 + improvement $ 32600 + building $48900 = $163000

 

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