Chapter 16 Problem 16-25 to 30
Problem 16-25 Answer A
Allocated cost of land (2,400,000 / 6,000,000 x 5,500,000) 2,200,000
Property taxes (2,400 / 6,000 x 250,000) 100,000
Cost of survey 5,000
Total cost of land 2,305,000
Incidentally, the cost of the building is:
Allocated cost (3,600 / 6,000 x 5,500,000) 3,300,000
Property taxes (3,600 / 6,000 x 250,000) 150,000
Renovation 500,000
Total cost of building 3,950,000 Problem 16-26 Answer A
Purchase price 4,000,000
Payments to tenants 200,000
Demolition of old building 100,000
Legal fees 50,000
Title insurance 30,000
Proceeds from sale of materials ( 10,000)
Total cost of land 4,370,000
Problem 16-27 Answer D
Land Building
Purchase price of land 600,000
Legal fees for contract 20,000
Architect fee 80,000
Demolition of old building 50,000
Construction cost _______ 3,500,000
Total cost 670,000 3,580,000
Problem 16-28 Answer D
Acquisition price 7,000,000
Option of building acquired 200,000
Repairs 500,000
Total cost 7,700,000
Problem 16-29 Answer D
Purchase price 250,000 Shipping 5,000
Installation 10,000
Testing 35,000
Total cost 300,000
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