Question

Brady Furniture purchased​ land, paying $ 80 comma 000 cash and signing a $ 320 comma 000 note payable. In​ addition, Brady paid delinquent property tax of $ 3 comma 000​, title insurance costing $ 4 comma 000​, and $ 9 comma 000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $ 750 comma 000. It also paid $ 55 comma 000 for a fence around the​ property, $ 15 comma 000 for a sign near the​ entrance, and $ 7 comma 000 for special lighting of the grounds.

Answer 1

Answer:

Land                         407,000

Building                   750,000

Land improvements  77,000

The company will depreicate the buildign and the land improvements

But, not the land as it doesn't suffer from the past of time.

Questions:

Value of the assets

and which assets will the company depreciate.

Explanation:

The demolition of the old buildign should be considered cost of the period. As no asset is improved or acquire for that event.

Land:

 80,000 cash

320,000 note payable

    3,000 deliquient property tax

    4,000 insurance costing

407,000 total land

Building:

cost: 750,000

Land Improvements:

fence                  55,000

sing at entrance 15,000

lighthing               7,000    

TOTAL                  77,000