Exercises

E$-$F:$9-17.$ Determining the cost of assets $($Learning Objective $1)$

Outdoor Furniture purchased land, paying $$70,000$ cash and signing a $$300,000$

note payable. In addition, Outdoor Furniture paid delinquent property tax of

$$2,500,$ title insurance costing $$2,000,$ and $$8,000$ to level the land and remove

an unwanted building. The company then constructed an office building at a

cost of $$700,000.$ It also paid $$55,000$ for a fence around the property, $$18,000$ for

a sign near the entrance, and $$10,000$ for special lighting of the grounds.

Requirements

Land $$382,500$

Determine the cost of the land, land improvements, and building.

Which of these assets will Outdoor Furniture depreciate?