Question

PotvinPotvin Self Storage purchased​ land, paying $ 165 comma 000$165,000 cash as a down payment and signing a $ 175 comma 000$175,000 note payable for the balance. PotvinPotvin also had to pay delinquent property tax of $ 5 comma 000$5,000​, title insurance costing $ 4 comma 000$4,000​, and $ 2 comma 000$2,000 to level the land and remove an unwanted building. The company paid $ 55 comma 000$55,000 to add soil for the foundation and then constructed an office building at a cost of $ 900 comma 000$900,000. It also paid $ 52 comma 000$52,000 for a fence around the​ property, $ 16 comma 000$16,000 for the company sign near the property​ entrance, and $ 6 comma 000$6,000 for lighting of the grounds.

Answer 1

land 400,000

land improvements 76,000

building 900,000

Step-by-step explanation:

cost 165,000 cash + 175,000 note payable = 340,000

delinquent property tax 5,000

soil 55,000

total land: 340,000 + 5,000 + 55,000 = 400,000

period cost: 2,000 demolition + 4,000 insurance

building: 900,000

Notice the soil while it is used for the fundation It will be part of the land not the building. If we demolish the building later the soild will be still there.

land improvements

fence 52,000

sing 16,000

lighting 6,000

Total 76,000