Carver Inc. purchased a building and the land on which the building is situated for a total cost of $811,100 cash. The land was appraised at $223,864 and the building at $708,901.

Required

2. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building.

3. Would the company recognize a gain on the purchase?

4. Record the purchase in a horizontal statements model.

Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

	Allocated Cost
Land
Building
Total	$0

Would the company recognize a gain on the purchase?

	Would the company recognize a gain on the purchase?

Record the purchase in a horizontal statements model. (In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA). If an element is not affected by the event, leave the cell blank. Enter any decreases to account balances and cash outflows with a minus sign. Round intermediate calculations to 2 decimal places and final answers to the nearest whole number.)

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CARVER INC.

Horizontal Statements Model

Balance Sheet

Income Statement

Statement of Cash Flows

Assets

=

Liabilities

+

Equity

Revenue

Expense

=

Net Income

Cash

+

Land

+

Building

+

+

=

+

=