Dixon Manufacturing purchased, for cash, three large pieces of equipment. Based on recent sales of similar equipment, the fair market values are as follows:

Piece 1 ...........$200,000

Piece 2 ...........$200,000

Piece 3 ...........$440,000

Required

1. What value is assigned to each piece of equipment if the equipment was purchased for (a) $480,000, (b) $680,000, and (c) $800,000?

2. How does the purchase of the equipment affect total assets?