Acompany acquired an office building on three acres of land for a lump-sum price of $2,400,000. the building was completely equipped. according to independent appraisals, the fair values were $1,300,000, $780,000, and $520,000 for the building, land, and equipment, respectively. at what amount would the company record the building?

$1,200,000

Explanation:

Given;

Acquisition of office building on three acres of land for a lump-sum price = $2,400,000

Fair values of

Building = $1,300,000

Land = $780,000

Equipment = $520,000

Amount to be recorded for building (Using fair value apportionment)

= $1,300,000/( $1,300,000 + $780,000 + $520,000) * $2,400,000

= $1,300,000/ $2,600,000 * $2,400,000

= $1,200,000

Amount to be recorded for building = $1,200,000

statement of owner"s equity;

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