What value should be assigned to the tract of land? $Answer What value should be assigned to the new warehouse? $Answer
What value should be assigned to the tract of land? $Answer What value should be assigned to the new warehouse? $Answer
Chapter9: Acquisitions Of Property
Section: Chapter Questions
Problem 46P
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Question
Determining the Cost of an Asset
Omar Corporation paid $300,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000.
In addition, several other costs were incurred:
Legal fees (associated with the purchase of the land) | $45,000 |
Architect fees (associated with the new warehouse) | $50,000 |
Interest on the construction loan (for the new warehouse) | $24,000 |
What value should be assigned to the tract of land?
$Answer
What value should be assigned to the new warehouse?
$Answer
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