Exercise 6-5A (Algo) Allocating costs on the basis of relative market values LO 6-1 Carver Inc. purchased a building and the land on which the building is situated for a total cost of $976,600 cash. The land was appraised at $280,772 and the building at $842,318. Required a. What is the accounting term for this type of acquisition? b. Determine the amount of the purchase cost to allocate to the land and the amount to allocate to the building. c. Would the company recognize a gain on the purchase? d. Record the purchase in a horizontal statements model. Required A Required B Required C Required D What is the accounting term for this type of acquisition? What is the accounting term for this type of acquisition? Land Building Total Allocated Cost Required A Required B Required C Required D Would the company recognize a gain on the purchase? Would the company recognize a gain on the purchase? CARVER INC. Horizontal Statements Model Balance Sheet Income Statement Assets Liabilities Equity Revenue Expense Cash Land Building Net Income Statement of Cash Flows