A. Abed bought a warehouse and land for $950,000. Along with the purchase price, Abed made the
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A. Abed bought a warehouse and land for $950,000. Along with the purchase price, Abed made the following expenditures related to the acquisition: broker’s commission, $47,000; title insurance, $12,500; miscellaneous closing costs, $14,500. Assume that Abed will use warehouse instead of demolishing it. The warehouse was independently appraised with an estimated fair values of the land and warehouse at $687,000 and $170,000, respectively. What amounts should Abed capitalize as the cost of the land and the building.
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