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Allocate the total purchase price to the three assets

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Assume Elridge Inc pays $625,000 for land, building and equipment. Also assume that an appraisal value revealed that the land's market value is $75,000, the building's market value is $480,000, and the equipment's market value is $130,000. Elridge Inc got a good deal paying only $625,000 for those 3 assets while the combined market value is $685,000

Problem 1: Allocate the total purchase price to the 3 assets.

Problem 2:  Record the journal entry for the transaction above

Reference no: EM132966303

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