Question

Riverboat Adventures pays $330,000 plus $11,000 in closing costs to purchase real estate. The real estate consists of land appraised at $49,000, a building appraised at $115,500, and paddleboats appraised at $185,500. Compute the cost that should be allocated to the building.

Answer 1

Answer:

$112,530

Explanation:

Cost Allocated to Building = ($330,000 + $11,000) × [$115,500/($115,500 + $49,000 + $185,500)] = $112,530