39.

Apartment building manager reports revenue of $1,350 per month. He was 100% occupied for the year. He pays $70 per month for water & trash for the complex. His insurance was $1,050 for the year. His payment on the building were $8,400 for the year. $4,815 of it was interest. He was $50 in advertising expense for the year. Maintenance totaled for year totaled $925. He will be depreciating the property $2,320 for the year. He is also depreciating a Heat & Air unit at $815 for the year, which he bought and installed this year for the cost of $5,000. He has $5,300 in his business bank account and is holding deposits of $1,300 in escrow. The land is valued at $20,000. The building is valued at 116,000 with the land. Total depreciation on the building has been $25,000. He owns the local printer $65; the plumber, $420 and the local paper $50. He owes $73,500 on the property. Property taxes for the year are $1,725. The owner paid income tax of $12,500 this year.

Depreciation of the P&L will include:

(A) The bIdg & land valued at $116,000

(B) Just the bIdg valued at $96,000

(C) Doesnt matter because depreciation does not show up the P&L

(D) Doesnt matter because depreciation will only go on the cash flow statement