How would FedEx divide a 120000 lumpsum purchase price for l

How would FedEx divide a $120,000 lump-sum purchase price for land, building, and equipment with estimated market values of $40,000, $95,000, and $15,000 respectively? (Round interim calculations to the nearest tenth of a percent, X.X%, and your final answers to the nearest whole dollar.) Estimated Market Cost of Value Each Asset 40,000 $ 95,000 $ 15,000 $150,000 Total

Solution

The FedEx should divide lum sum purchase price paid on the basis of market value, Such percentage should be taken as basis on the purpose for which amount should be divide,

% Share of land in total market value = 40000/150000*100= 26.7%

% of share of Building in market value = 95000/150000*100= 63.3%

% of share of equipment in market value = 15000/150000*100= 10%

Cost of each asset

Land = 120000*26.7% = 32040$

Building = 120000*63.3%= 75960$

Equipment = 120000*10% = 12000$

Total. = 120000$