Question Help Anderson Corporation has purchased a group of

Question Help

Anderson Corporation has purchased a group of assets for

$16,600.

The assets and their relative market values are listed below.

Land

6,500

Equipment

2,400

Building

3,400

Which of the following amounts would be debited to the Land? account? (Round any intermediate calculations to two decimal? places, and your final answer to the nearest? dollar.)

A.

$ 3 comma 320$3,320

B.

$ 4 comma 100$4,100

C.

$ 8 comma 798$8,798

D.

$ 4 comma 648

Solution

Answer is $8,798

Total Market Value of Assets = Market Value of Land + Market Value of Equipment + Market Value of Building
Total Market Value of Assets = $6,500 + $2,400 + $3,400
Total Market Value of Assets = $12,300

Cost of Land = Total Purchase Price * Market Value of Land / Total Market Value of Assets
Cost of Land = $16,600 * $6,500 / $12,300
Cost of Land = $8,798