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w1 homework answers - Chapter 10 Homework Exercise 10-1...

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Unformatted text preview: Chapter 10 Homework Exercise 10-1 Capitalized cost of land : Purchase price $60,000 Demolition of old building $4,000 Less: Sale of materials (2,000 ) 2,000 Legal fees for title investigation 2,000 Total cost of land $64,000 Capitalized cost of building : Construction costs $500,000 Architect's fees 12,000 Interest on construction loan 5,000 Total cost of building $517,000 Note: Property taxes on the land for the period after acquisition are not part of acquisition cost. They are expensed in the period incurred. Exercise 10-8 Asset Fair Value Percent of Total Fair Value Initial Valuation (Percent x $900,000) Land ........................ $ 300,000 30% $270,000 Building A ............... 450,000 45 405,000 Building B ............... 250,000 25 225,000 $1,000,000 100% $900,000 Exercise 10-18 Requirement 1 Fair value of old land + Cash given = Fair value of new land $72,000 + 14,000 = $86,000 Requirement 2 Land–new ($72,000 + 14,000).........................................................Land–new ($72,000 + 14,000)....
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This note was uploaded on 10/12/2010 for the course ACCT 305 taught by Professor Rans during the Summer '10 term at DeVry Decatur.

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w1 homework answers - Chapter 10 Homework Exercise 10-1...

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