What are the Current Assessed Valuation and Vendor's Original Cost for the land, warehouse, and office building purchased by Sheffield Corp.?
The appropriate amounts that Sheffield should record for the land, warehouse, and office building, respectively are given as follows:
Land = $530,700
Warehouse = $375,150
Office building = $741,150
Explanation:
Current Assessed Valuation and Vendor's Original Cost:
The data provided includes the Current Assessed Valuation and Vendor's Original Cost for the land, warehouse, and office building purchased by Sheffield Corp.
- Land:
Current Assessed Valuation = $580,000
Vendor's Original Cost = $530,000
- Warehouse:
Current Assessed Valuation = $410,000
Vendor's Original Cost = $380,000
- Office building:
Current Assessed Valuation = $810,000
Vendor's Original Cost = $680,000
To determine the appropriate amounts that Sheffield should record for each asset, we need to calculate the proportions based on the Current Assessed Valuation compared to the total Current Assessed Valuation of all assets purchased.
Calculations:
Using the formula:
Asset amount = (Current Assessed Valuation of the asset / Total Current Assessed Valuation of all assets) * Purchase price of the tract of land
We can calculate the appropriate amounts as follows:
- Land: ($580,000 / $1,800,000) * $1,647,000 = $530,700
- Warehouse: ($410,000 / $1,800,000) * $1,647,000 = $375,150
- Office building: ($810,000 / $1,800,000) * $1,647,000 = $741,150
Therefore, the appropriate amounts that Sheffield should record for the land, warehouse, and office building are as follows:
- Land: $530,700
- Warehouse: $375,150
- Office building: $741,150