Millburn Company has acquired a property that included both land and a building for $530,000. The company hired an appraiser who has determined that the market value of the land is $320,000 and that of the building is $480,000. At what amount should the company record the cost of land? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
A) $349,800
B) $128,000
C) $265,000
D) $212,000
D) $212,000
Explanation: Land percentage of total value = 320,000 / (320,000 + 480,000) = 0.40
Cost of land = Lump-sum purchase price × Land percentage of total value = $530,000 × 0.40 = $212,000
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