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Exercise 8-5A (Static) Allocating costs on the basis of relative market values LO 8-1 ...

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Accounting

Exercise 8-5A (Static) Allocating costs on the basis of relative market values LO 8-1
Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $700,000 cash. The land was appraised at $320,000 and the building at $480,000.
Required
a. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.
b. Would the company recognize a gain on the purchase?
c. Record the purchase in a horizontal statements model.
d. Record the purchase in general journal format.

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