A restaurant is purchasing an adjoining piece of land to be used to expand the restaurants parking

Question:

A restaurant is purchasing an adjoining piece of land to be used to expand the restaurant’s parking area. The land cost is $85,000. Grading and leveling the land will cost $10,000. Paving the lot will cost $45,000. Signage and line painting will cost $8,000. Installing overhead lighting will cost $15,000. Landscaping the lot will cost $4,000. Assuming no salvage value, what amount of this parking lot project can be depreciated by the restaurant’s owners?

a. $82,000

b. $75,000

c. $159,000

d. $167,000

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...