Millburn Corporation has acquired a property that included both land and a building for $510,000. The corporation hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $440,000. At what amount should the corporation record the cost of land? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Question

Deborah

Business

6 August, 01:52

Millburn Corporation has acquired a property that included both land and a building for $510,000. The corporation hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $440,000. At what amount should the corporation record the cost of land? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

+4

Answers (1)

Know the Answer?

Colin Mcpherson · Answer 1

Answer: $2,14,200

Explanation:

The total market value of the land and building = 3,20,000 + 4,40,000

=$7,60,000

Now, we have calculated the percentage of land involved in the total market value are as follows:

= / frac{320000}{760000} * 100

= 42%

Now,

the value of land = 42% of $5,10,000

= $2,14,200

This is the amount that corporation should record the cost of land.