Lavallee Furniture purchased land, paying $95,000 cash plus a $260,000 note payable. In addition, Lavallee paid delinquent property tax of $3,000, title insurance costing $2,000, and $5,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $450,000. It also paid $55,000 for a fence around the property, $16,000 for a sign near the entrance, and $7,000 for special lighting of the grounds. Requirements Determine the cost of the land, land improvements, and building. Which of these assets will Lavallee depreciate?
Lavallee Furniture purchased land, paying $95,000 cash plus a $260,000 note payable. In addition, Lavallee paid delinquent property tax of $3,000, title insurance costing $2,000, and $5,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $450,000. It also paid $55,000 for a fence around the property, $16,000 for a sign near the entrance, and $7,000 for special lighting of the grounds. Requirements Determine the cost of the land, land improvements, and building. Which of these assets will Lavallee depreciate?
Chapter3: Analyzing And Recording Transactions
Section: Chapter Questions
Problem 23MC: A company purchased a building twenty years ago for $150,000. The building currently has an...
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Question
Determining the cost of assets
Learning Objective 1
- Land $365,000
Lavallee Furniture purchased land, paying $95,000 cash plus a $260,000 note payable. In addition, Lavallee paid delinquent property tax of $3,000, title insurance costing $2,000, and $5,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $450,000. It also paid $55,000 for a fence around the property, $16,000 for a sign near the entrance, and $7,000 for special lighting of the grounds.
Requirements
- Determine the cost of the land, land improvements, and building.
- Which of these assets will Lavallee
depreciate ?
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