Question
7. Tacos and Tangerines Restaurant is going to build a new restaurant. The company purchased a piece of land for $100,000. An existing building was
7. Tacos and Tangerines Restaurant is going to build a new restaurant. The company purchased a piece of land for $100,000. An existing building was on the land, and it cost $10,000 to have the building razed. However, Tacos and Tangerines was able to sell some of the salvaged material from the building for $5,000. Tangerines and Tacos installed fencing, a patio, and a sprinkler system for $25,000. Architects fees for the new building are $75,000, and it cost $350,000 to build the new restaurant. They also spent $7,000 in legal costs to purchase the land and paid $6,000 to a title company. Kitchen equipment, dining tables and chairs, and bar equipment totaled $200,000.
a. How much should Tacos and Tangerines capitalize for the land?
b. How much should Tacos and Tangerines capitalize for the building?
c. How much should Tacos and Tangerines capitalize for the land improvements?
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