Determining the cost of assets Lawson Furniture purchased land, paying $65,000 cash and signing a $250,000 note payable. In addition, Lawson paid delinquent property tax of $5,000, title insurance costing $4,000, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $54,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for a special lighting of the grounds. Requirements Determine the cost of the land, land improvements, and building. Which of these assets will Lawson depreciate?
Determining the cost of assets Lawson Furniture purchased land, paying $65,000 cash and signing a $250,000 note payable. In addition, Lawson paid delinquent property tax of $5,000, title insurance costing $4,000, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $54,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for a special lighting of the grounds. Requirements Determine the cost of the land, land improvements, and building. Which of these assets will Lawson depreciate?
Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion
Section: Chapter Questions
Problem 38P
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Question
Determining the cost of assets
Lawson Furniture purchased land, paying $65,000 cash and signing a $250,000 note payable. In addition, Lawson paid delinquent property tax of $5,000, title insurance costing $4,000, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $54,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for a special lighting of the grounds.
Requirements
- Determine the cost of the land, land improvements, and building.
- Which of these assets will Lawson
depreciate ?
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