$179,980 Broker's commission
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 25CE: Cost of Intangible Assets Advanced Technological Devices Inc. acquired a patent for $91,500. It...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Question
What is the cost of the land, based upon the following data?
Land purchase price | $179,980 |
Broker's commission | 15,546 |
Payment for the demolition and removal of existing building | 3,928 |
Cash received from the sale of materials salvaged from the demolished building | 2,519 |
$fill in the blank 1
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