Question
Notes: Land is not depreciated but the cost of land improvement is depreciated e.g. parking lot surface, fencing, lighting and Shrubs. Cost of purchased building
Notes:
Land is not depreciated but the cost of land improvement is depreciated e.g. parking lot surface, fencing, lighting and Shrubs.
Cost of purchased building includes price, closing cost, taxes, title fees, attorney's fees, and other cost to get it ready for use. Cost of constructed building includes all construction cost plus capitalized interest during construction. Cost of machinery and equipment >> includes price plus all necessary cost to put into intended use
Lump sum purchase Get an appraisal of each item; calculate ratio of each item to total appraised value. Use the ratio to allocate the lump-sum cost. Can we use the following cost data to compute the cost of the land?
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Cost of land includes: Cash price of the property: $ 125,000, Cost to remove old warehouse: $9,500, Receipts from the sale of salvage materials: $3,500, Other closing and registration cost $6,000
Question: What is the cost of the land?
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