Question

Lavallee Self Storage purchased​ land, paying $ 160 comma 000 cash as a down payment and signing a $ 145 comma 000 note payable for the balance. Lavallee also had to pay delinquent property tax of $ 4 comma 000​, title insurance costing $ 1 comma 500​, and $ 3 comma 000 to level the land and remove an unwanted building. The company paid $ 60 comma 000 to add soil for the foundation and then constructed an office building at a cost of $ 1 comma 100 comma 000. It also paid $ 55 comma 000 for a fence around the​ property, $ 12 comma 000 for the company sign near the property​ entrance, and $ 2 comma 000 for lighting of the groundsWhat is the capitalized cost of each of Murphy’s land, land improvements, and building?

Answer 1

Answer:

Land 373,500

Building 1,100,000

land improvements   67,000

Fence         55,000

Sign            12,000

Explanation:

Land cost:

cash                               160,000

note payable                   145,000

delinquent property tax     4,000

insurance costing                1,500

level the land                      3,000

soil                                    60,000

Total land:                      373,500

The land will be recorded for all the cost necessary to get it ready for use.

The soil, once added can't be differentiate from the original land. It is added to the land is not an improvement.

The office building will be for 1,100,000

land improvements will be the fence and signs:

fence 55,000

sign    12,000  

total   67,000