The amount the company would record the land its in books of accounts is $120,000.
This question relates to business assets acquisition, where a single purchase consideration is paid in respect of multiple assets such that the fair values of the assets acquired would be used as the basis for determining the amount the company would record for each asset in its books of accounts.
In order words, the value attributable to each is its fair value as a percentage of total fair values multiplied by the single purchase price.
Total fair value=$150,000+$1,050,000+$300,000
Total fair value=$1,500,000
Based on the above explanation, the value of the land is computed thus:
value of land=fair value of land/total fair value*purchase price
value of land=$150,000/$1,500,000*$1,200,000
value of land=$120,000
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