Pointer Company buys a piece of property in north Toronto that has the following costs...
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Accounting
Pointer Company buys a piece of property in north Toronto that has the following costs associated with the purchase: Invoice price for land and building = $319,000 Legal fees associated with the purchase = $12,000 Unpaid property taxes assumed by Pointer as part of the purchase agreement = $28,000 Cost of having property professionally appraised = $11,900 The appraisal report shows the building has an appraised market value of $400,000 and the land has an appraised value of $100,000.
Required 1: What amount should be capitalized as the value of the land on Pointer's book? $
Required 2: What amount should be capitalized as the value of the building on Pointer's book? $
Required 3: If the property acquired will be depreciated in 40 years with no residual value (assume the straight-line depreciation is used), what is the depreciation expense for the first full year of use? $
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