AccountingHub
C1

What it costs to get ready

$900,000 buys land and a building in one deal. Neither price is given — only what each was appraised at.

Lump-sum purchase, allocated by appraised value
Land270,000
Building630,000
Cash900,000

Land $270,000 + Building $630,000 = $900,000

The records a at everything normal and necessary to get it ready for its intended use — price, freight, installation, testing. Once it is running, later costs are a different question.

A splits one price across several assets by their relative appraised values, because and need separate cost bases — only one of them depreciates.