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

Business

Norah Mcbride

13 December, 05:28

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.)

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Answers (1)

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Thaddeus Barnes · 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.