Question

Guac Co. paid $350,000 for a purchase that included land, a building, and equipment. An appraiser estimated the market value of the land to be $80,000, the building to be $300,000, and the equipment to be $20,000. Based on this information recording the basket purchase in the accounting records would cause _______.

Answer 1

Answer:

Guac Co. paid $350,000 for a purchase that included land, a building, and equipment. An appraiser estimated the market value of the land to be $80,000, the building to be $300,000, and the equipment to be $20,000. Based on this information recording the basket purchase in the accounting records would cause no effect on total assets or total equity.