Red Rock Bakery purchases land, building, and equipment for a single purchase price of $500,000. However, the estimated fair values of the land, building, and equipment are $210,000, $330,000, and $60,000, respectively, for a total estimated fair value of $600,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment. X Answer is complete but not entirely correct. Estimated Fair Value Amount of Basket Purchase Allocation Recorded Percentage Amount Land 210,000 O 25 X % $ 500,000 O $ 125,000 X Building 330,000 65 X % 500,000 V 325,000 500,000 O $ Equipment 60,000 V 15 X % 75,000 X Total $ 600,000 525,000

Red Rock Bakery purchases land, building, and equipment for a single purchase price of $500,000. However, the estimated fair values of the land, building, and equipment are $210,000, $330,000, and $60,000, respectively, for a total estimated fair value of $600,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment. X Answer is complete but not entirely correct. Estimated Fair Value Amount of Basket Purchase Allocation Recorded Percentage Amount Land 210,000 O 25 X % $ 500,000 O $ 125,000 X Building 330,000 65 X % 500,000 V 325,000 500,000 O $ Equipment 60,000 V 15 X % 75,000 X Total $ 600,000 525,000

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 53P

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