Murphy Industrial Systems purchased land, paying $70,000 cash as a down payment and signing a $150,000 note payable for the balance. In addition, Murphy Industrial Systems paid delinquent property tax of $1,800, title insurance costing $2,700, and a $5,500 charge for leveling the land and removing an unwanted building. The company constructed an office building on the land at a cost of $795,000. It also paid $16,000 for a fence around the property, $3,800 for the company sign near the entrance, and $7,000 for special lighting of the grounds.

Requirements

1. Determine the cost of the company's land, land improvements, and building.

2. Which of the assets will Murphy Industrial Systems depreciate?