Recording Property Acquisition for Marigold Corp.

Appropriate Amounts for Land, Warehouse, and Office Building

On April 1, Marigold Corp. purchased for $1,575,000 a tract of land on which a warehouse and office building was located. The following data were collected concerning the property:

Current Assessed Valuation Vendor's Original Cost

Land: $570,000 $520,000

Warehouse: $400,000 $370,000

Office building: $830,000 $678,000

Total: $1,800,000 $1,568,000

What are the appropriate amounts that Marigold should record for the land, warehouse, and office building, respectively?

The appropriate amounts that Marigold should record for the land, warehouse, and office building are as follows:

Land: $520,000

Warehouse: $370,000

Office building: $678,000

Explanation:

To determine the appropriate amounts that Marigold should record for the land, warehouse, and office building, we need to compare the purchase price with the assessed valuation and the vendor's original cost for each component.

Based on the given data:

The purchase price for the entire property is $1,575,000.

The assessed valuation for the land is $570,000, and the vendor's original cost for the land is $520,000.

The assessed valuation for the warehouse is $400,000, and the vendor's original cost for the warehouse is $370,000.

The assessed valuation for the office building is $830,000, and the vendor's original cost for the office building is $678,000.

Comparing the purchase price with the assessed valuation and the vendor's original cost, we can determine the appropriate amounts to record:

The appropriate amount to record for the land is $520,000, as it is the lower value between the assessed valuation and the vendor's original cost.

The appropriate amount to record for the warehouse is $370,000, as it is the lower value between the assessed valuation and the vendor's original cost.

The appropriate amount to record for the office building is $678,000, as it is the lower value between the assessed valuation and the vendor's original cost.