Question

Entre Preneur found a site for his new haute cuisine restaurant. The site has a vacant gasoline station. He purchased the property for $ 900,000 and had the station demolished at a cost of $ 30,000. A government regulation required that he spend $ 40,000 to remove and dispose of three underground tanks and $ 30,000 to refine the soil. The restaurant was constructed for $ 1,800,000. Avoidable interest during construction totaled $ 22,000.

Team Debate:
Team 1: Present arguments for capitalizing all of the above costs. Your arguments should use the conceptual framework definitions and concepts.
Team 2: Criticize capitalization of the cost to remove the tanks and refine the soil and the capitalization of interest during construction. Do they provide added service potential? Your arguments should use the conceptual framework definitions and concepts.



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  • CreatedDecember 17, 2014
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