Solution-What amount should be capitalized as the value of

What amount should be capitalized as the value of the land

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Reference no: EM133152723

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 = $287,500

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 = $8,750

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?

2: What amount should be capitalized as the value of the building on Pointer's book?

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?

Reference no: EM133152723

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What amount should be capitalized as the value of the land

Reference no: EM133152723

Reference no: EM133152723

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