Pointer Company buys a piece of property in north Toronto that has the following costs associated with
Question:
Pointer Company buys a piece of property in north Toronto that has the following costs associated with the purchase:
Invoice price for land and building = $307,000
Legal fees associated with the purchase = $12,000
Unpaid property taxes assumed by Pointer as part of the purchase agreement = $28,000
Cost of having property professionally appraised = $10,700
The appraisal report shows the building has an appraised market value of $400,000 and the land has an appraised value of $100,000.
Required 1: What amount should be capitalized as the value of the land on Pointer's book? $
Required 2: What amount should be capitalized as the value of the building on Pointer's book?
Required 3: If the property acquired will be depreciated in 40 years with no residual value (assume the straight-line depreciation is used), what is the depreciation expense for the first full year of use?
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen