Which the historical cost of the various asset be determined

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Problem 1: In a "basket price" or "lump sum" purchase of assets, which of the following best describes the process by which the historical cost of the various assets should be determined?

a. Allocation of the total cost to the individual assets on the basis of the historical cost of the individual assets to the original owner.

b. Allocation of the total cost to the individual assets on the basis of the fair value of the individual assets at the time of purchase.

c. Recording of the individual assets at their fair value with recognition of the gain or loss for the difference between the price and the fair value of the assets.

Reference no: EM132808849

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