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ABC Company purchased the assets of XYZ Company at an auction for $6,440,000. An independent...

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ABC Company purchased the assets of XYZ Company at an auction for $6,440,000. An independent appraisal of the fair value of the assets is listed below: Land $2,185,000 Building 3,220,000 Equipment 2,415,000 Trucks 3,910,000 Assuming that specific identification costs are impracticable and that ABC allocates the purchase price on the basis of the relative fair values, what amount would be allocated to the Building? $2,108,720 $1,767,843 $1,100,000 $1,588,645 Two independent companies, ABC Co. and XYZ Co., are in the home building business. Each owns a tract of land held for development, but each would prefer to build on the other's land. They agree to exchange their land. An appraiser was hired, and from her report and the companies' records, the following information was obtained: ABC's Land XYZ's Land Cost and book value $720,000 $360,000 Fair value based upon appraisal 900,000 787,500 The exchange was made, and based on the difference in appraised fair values, XYZ paid $112,500 to ABC. The exchange lacked commercial substance. The new land should be recorded on ABC's books at $504,000. $576,000. $630,000 $720,000

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