Sunland Company Purchase of a Tract of Land

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

The appropriate amounts that Sunland should record for the land, warehouse, and office building are as follows: - Land: $558,000 - Warehouse: $351,000 - Office building: $711,000 These amounts were calculated by allocating the total cost of the property based on the current assessed valuation and the vendor's original cost of each component.

Calculation Details:

Land: $620,000 / $1,800,000 * $1,620,000 = $558,000 Warehouse: $390,000 / $1,800,000 * $1,620,000 = $351,000 Office building: $790,000 / $1,800,000 * $1,620,000 = $711,000 The total cost of the property purchased by Sunland Company was $1,620,000, with the land valued at $620,000, the warehouse at $390,000, and the office building at $790,000. By allocating the total cost proportionally based on the original cost of each component, we arrive at the appropriate amounts that Sunland should record for each part of the property.
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