Allocation of Package Purchase Price
Andrew Lupino went into business by purchasing a car lubrication station consisting of land, a building, and equipment. The seller’s original asking price was $210,000. Lupino hired an appraiser for $2,000 to appraise the assets. The appraised valuations were:
| Property | Assessed Value |
|---|---|
| Land | $38,000 |
| Building | 95,000 |
| Equipment | 57,000 |
| Total | $190,000 |
After receiving the appraisal, Lupino offered $170,000 for the business. The seller refused this offer. Lupino then offered $180,000 for the business, which the seller accepted. Using the appraisal values as a guide, allocate the total purchase price of the car lubrication station to the Land, Building, and Equipment accounts.
| Asset | Allocation of Purchase Price |
|---|---|
| Land | $ |
| Building | |
| Machinery | |
| Total | $ |
