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.

Answer rating: 100% (QA)

To determine the amounts that Abed should capitalize as the cost of the land and the building we nee... View the full answer