Valix Finacc vol 1 Problem 16-7

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 16 Problem 16-7

                                                                                                            Land         Building

Purchase price                                                                     1,000,000       4,000,000

Remodeling                                                                                                             150,000

Salvage materials                                                                                              (       5,000)

Grading, leveling and other permanent improvement                     50,000

Repairs                                                                                            ________             10,000

                                                                                                       1,050,000         4,155,000

 

The repairs are capitalized because they are necessary prior to the occupancy and intended use of the building.