E 9-2A.

Allocation of Package Purchase Price

Tamock Company purchased a plant from one of its suppliers. The $950,000 purchase price included the land, building, and factory machinery. Tamock also paid $6,000 in legal fees to negotiate the purchase of the plant. An appraisal showed the following values for the items purchased:

Property

Assessed Value

Percentage of Fair Value

Account Value

Land..

$126,000

Building.

456,000

Machinery

318,000

Total..

900,000

100%

Using the assessed value as a guide, allocate the total purchase price of the plant to the land, building, and machinery accounts in Tamock Company's Records.