Bob the Builder purchased a small warehouse for $360,000. The municipal tax assessment indicates that the property was assessed for $300,000, which consists of $200,000 for the building and $100,000 for the land. The warehouse had been vacant for the last few months and needed considerable renovation work before it could be used. The following costs (in addition to $360,000 purchase cost) were incurred before the company moved into the building on November 30: the seller's unpaid property tax for the entire Year 7 ($1,800); roof work ($2,400);window work ($1,800); paint work ($1,000); and new fence ($4,000). What would be the total amount to be capitalized as building?

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Solution Amount to be capitalized as building Purchase ... View the full answer