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A company purchases a 10,000 square foot commercial building for $400,000 and spends an additional $65,000 to divide the space into two separate rental units and prepare it for rent. Unit A, which has the desirable location on the corner and contains 2,500 square feet, will be rented for $2.00 per square foot. Unit B contains 7,500 square feet and will be rented for $1.50 per square foot.

How much of the joint cost should be assigned to Unit B using the value basis of allocation?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9949393

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