ACC - Peach Management owns several apartment complexes

Peach Management owns several apartment complexes throughout the city of Atlanta. It just acquired a new piece of property that has been appraised at $775,000. The assets and their values are listed as follows.

Asset Value

Building $475,000

Furnishings 50,000

Land 150,000

Land improvements 100,000

Total $775,000

Peach Management purchased the property in a foreclosure for $600,000. Create a worksheet (file name BASKET) that will allocate the purchase price among the assets acquired.

Review the Model-Building Problem Checklist on page 154 to ensure that your worksheet is complete. Print the worksheet when done. Check figure: Allocated cost of the building, $367,742.

Use the following purchase price to test your model: $700,000.