Lawson Furniture purchased land, paying $65,000 cash and signing a $250,000 note payable. In addition, Lawson paid delinquent property tax of $5,000, title insurance costing $4,000, and $9,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $54,000 for a fence around the property, $12,000 for a sign near the entrance, and $8,000 for special lighting of the grounds. Read the requirements. Requirement 1. Determine the cost of the land, land improvements, and building The cost of the land is S Requirements 1. Determine the cost of the land, land improvements, and building. 2. Which of these assets will Lawson depreciate? Print Done

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andromache andromache · Answer 1 · 2019-09-05T08:14:31+02:00

Answer:

1. The cost of the land, land improvements, and building are $333,000, $74,000 and $400,000 respectively

2. Building and land improvements.

Explanation:

1. The computation of the cost of land is computed below:

= Cash paid + notes payable + property tax + title insurance + level of land

= $65,000 + $250,000 + $5,000 + $4,000 + $9,000

= $333,000

The computation of the cost of land improvements is computed below:

= fence cost + sign near the entrance cost + special lighting

= $54,000 + $12,000 + $8,000

= $74,000

The computation of the building is computed below:

= Construction cost of building

= $400,000

2. The assets which are depreciated is building and land improvements only as land is non depreciable asset.

1. Hence, the cost of the land, land improvements, and building are $333,000, $74,000 and $400,000 respectively

2. Building and land improvements.

abiolataiwo2015 abiolataiwo2015 · Answer 2 · 2022-04-01T11:35:24+02:00

1. The cost of the land, land improvements, and building are $333,000, $74,000 and $400,000.

2. Building and land improvements.

1. Cost of land

Cost of land= $65,000 + $250,000 + $5,000 + $4,000 + $9,000

Cost of land= $333,000

Cost of land improvements= $54,000 + $12,000 + $8,000

Cost of land improvements= $74,000

Construction cost of building= $400,000

2. The assets that Lawson will depreciate is Building and land improvements.

Inconclusion the cost of the land, land improvements, and building are $333,000, $74,000 and $400,000.

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