Question

Shidan Apartments purchased an apartment building to rent to university students on November 18, 2017. The following costs were incurred during 2017, before the tenants moved in: Purchase price of the building $220,000 Purchase price of the land 100,000 Transfer taxes 10,000 Interest incurred on the mortgage loan to purchase 4,000 Attorney and real estate agent's fees 15,000 Repave the parking lot 6,000 How much will Shidan Apartments record as an asset

Answer 1

$351,000

Step-by-step explanation:

The computation of the amount of an asset is as follows;

Purchase price of the building $220,000

Purchase price of the land $100,000

Transfer taxes $10,000

Attorney and real estate agent's fees $15,000

Repave the parking lot $6,000

Cost of apartment $351,000

hence, the cost of an apartment is $351,000