PROBLEM 13–32 Keep or Sell Property [LO1] Ben Ryatt, professor of languages at a southern university, owns a small office building adjacent to the university campus. He acquired the property 12 years ago at a total cost of $560,000–$52,000 for the land and $508,000 for the building. He has just received an offer from a realty company t wants to purchase the property; however, the property has been a good source of income over the years, so Professor Ryatt is unsure whether he should keep it or sell it. His alternatives are: Keep the property. Professor Ryatt's accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and that expenses: Rental receipts $150,000 Less building expenses: Utilities . $28,600 17,800 Depreciation of kuilding.. Property taxes and insurance Repairs and maintenance.. Custodial help and supplies 19,500 10,500 43,500 119,900 Net operating income. $ 30,100 lo tim Professor Ryatt makes a $12,600 mortgage payment each year on the property. The mortgage will be paid off in 10 more years. He has been depreciating the building by the straight-line method,

PROBLEM 13–32 Keep or Sell Property [LO1] Ben Ryatt, professor of languages at a southern university, owns a small office building adjacent to the university campus. He acquired the property 12 years ago at a total cost of $560,000–$52,000 for the land and $508,000 for the building. He has just received an offer from a realty company t wants to purchase the property; however, the property has been a good source of income over the years, so Professor Ryatt is unsure whether he should keep it or sell it. His alternatives are: Keep the property. Professor Ryatt's accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and that expenses: Rental receipts $150,000 Less building expenses: Utilities . $28,600 17,800 Depreciation of kuilding.. Property taxes and insurance Repairs and maintenance.. Custodial help and supplies 19,500 10,500 43,500 119,900 Net operating income. $ 30,100 lo tim Professor Ryatt makes a $12,600 mortgage payment each year on the property. The mortgage will be paid off in 10 more years. He has been depreciating the building by the straight-line method,

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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