Alpha Company has three components in their lease agreement: the building, the equipment and the maintenance service. Total consideration in the contract is $500,000 per year. Alpha Company has identified the following standalone prices: Component Standalone Price Building $400,000 Equipment 100,000 Maintenance/ Service 50,000 Total $550,000 How much consideration should be allocated to the equipment? Alpha Company has three components in their lease agreement: the building, the equipment and the maintenance service. Total consideration in the contract is $500,000 per year. Alpha Company has identified the following standalone prices: Component Standalone Price Building $400,000 Equipment 100,000 Maintenance/ Service 50,000 Total $550,000 How much consideration should be allocated to the equipment?

Answer rating: 100% (QA)

To allocate the consideration to each component in the lease agreement based on their standalone pri... View the full answer