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21 December, 07:01

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.

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  1. 21 December, 07:19
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    land 400,000

    land improvements 76,000

    building 900,000

    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
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