Mackay Industries, Inc., purchased land, paying $80,000 cash as a down payment and signing a $160,000 note payable for the balance. In addition, Mackay Industries, Inc., paid delinquent property tax of $4,300, title insurance costing $3,100, and a $7,800 charge for leveling the land and removing an unwanted building. The company constructed an office building on the land at a cost of $485,000. It also paid $23,000 for a fence around the property, $5,700 for the company sign near the entrance, and $11,600 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 Mackay Industries, Inc., depreciate?