Crane Farms purchased real estate for $1,190,000, which included $4,100 in legal fees. It paid $265,000...

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Crane Farms purchased real estate for $1,190,000, which included $4,100 in legal fees. It paid $265,000 cash and incurred a mortgage payable for the balance. The real estate included land that was appraised at $488,160, a building appraised at $745,800, and fences and other land improvements appraised at $122,040. The building has an estimated useful life of 60 years and a $56,000 residual value. Land improvements have an estimated 15-year useful life and no residual value. (a) Calculate the cost that should be allocated to each asset purchased. Land $ Building $ Land Improvements $ Crane Farms purchased real estate for $1,190,000, which included $4,100 in legal fees. It paid $265,000 cash and incurred a mortgage payable for the balance. The real estate included land that was appraised at $488,160, a building appraised at $745,800, and fences and other land improvements appraised at $122,040. The building has an estimated useful life of 60 years and a $56,000 residual value. Land improvements have an estimated 15-year useful life and no residual value. (a) Calculate the cost that should be allocated to each asset purchased. Land $ Building $ Land Improvements $

Answer rating: 100% (QA)

To calculate the cost allocated to each asset purchased we need to subtract the legal fees from the ... View the full answer