Fullerton Waste Management purchased land and a warehouse for $790,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker's commission, $49,000; title insurance, $12,500; miscellaneous closing costs, $15,500. Assume that Fullerton decides to use the warehouse rather than demolish it. An independent appraisal estimates the fair values of the land and warehouse at $623,000 and $267,000, respectively. Determine the amounts Fullerton should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building

Fullerton Waste Management purchased land and a warehouse for $790,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker's commission, $49,000; title insurance, $12,500; miscellaneous closing costs, $15,500. Assume that Fullerton decides to use the warehouse rather than demolish it. An independent appraisal estimates the fair values of the land and warehouse at $623,000 and $267,000, respectively. Determine the amounts Fullerton should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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Samtech Manufacturing purchased land and a building for $4 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance. Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $ 25,000 9,500 45,000 4,900 An independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $2 million, respectively. Shortly after acquisition, Samtech spent $91,000 to construct a parking lot and $49,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $340,000 and the salvaged materials were sold for $5,500. In addition, Samtech spent $88,000 clearing and grading the land in preparation for the…
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Samtech Manufacturing purchased land and building for $3 million. In addition to the purchase price, Samtech made the following expenditures in connection with the purchase of the land and building: Title insurance Legal fees for drawing the contract Pro-rated property taxes for the period after acquisition State transfer fees $ 29,000 6,500 49,000 5,300 An Independent appraisal estimated the fair values of the land and building, if purchased separately, at $3 and $2 million, respectively. Shortly after acquisition, Samtech spent $95,000 to construct a parking lot and $53,000 for landscaping. Required: 1. Determine the initial valuation of each asset Samtech acquired in these transactions. 2. Determine the initial valuation of each asset, assuming that immediately after acquisition, Samtech demolished the building. Demolition costs were $380,000 and the salvaged materials were sold for $7,500. In addition, Samtech spent $92,000 clearing and grading the land in preparation for the…