Tamock Company purchased a plant from one of its suppliers. The $950,000 purchase price included the land, a building, and a factory machinery. Tamock also paid $6,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased: Property Assessed Value Land $126,000 Building $456,000 Machinery $318,000 Total $900,000 Using the assessed value as a guide, allocate the total purchase price of the plant to the land, building and machinery accounts in Tamock Company’s records.
E9-2A
Allocation of Package Purchase Price
Tamock Company purchased a plant from one of its suppliers. The $950,000 purchase price included the land, a building, and a factory machinery. Tamock also paid $6,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased:
Property Assessed Value
Land $126,000
Building $456,000
Machinery $318,000
Total $900,000
Using the assessed value as a guide, allocate the total purchase price of the plant to the land, building and machinery accounts in Tamock Company’s records.
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