Exercise $8-5$A $($Static$)$ Allocating costs on the basis of relative market values LO $8-1$

Carver Incorporated purchased a building and the land on which the building is situated for a total cost of $$700,000$ cash. The land was appraised at $$320,000$ and the building at $$480,000.$

Required

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

b$.$ Would the company recognize a gain on the purchase?

c$.$ Record the purchase in a horizontal statements model.

d$.$ Record the purchase in general journal format.