Fullerton Waste Management purchased land and a warehouse for $750,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker's commission, $45,000; title insurance, $10,500; miscellaneous closing costs, $13,500. 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 $680,000 and $170,000, 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 $750,000. In addition to the purchase price, Fullerton made the following expenditures related to the acquisition: broker's commission, $45,000; title insurance, $10,500; miscellaneous closing costs, $13,500. 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 $680,000 and $170,000, respectively. Determine the amounts Fullerton should capitalize as the cost of the land and the building. Capitalized cost of land Capitalized cost of building
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Fullerton Waste Management purchased land and a warehouse for $750,000. In addition to the purchase price, Fullerton made the
following expenditures related to the acquisition: broker's commission, $45,000; title insurance, $10,500; miscellaneous closing costs,
$13,500. 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 $680,000 and $170,000, respectively.
Determine the amounts Fullerton should capitalize as the cost of the land and the building.
Capitalized cost of land
Capitalized cost of building
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