Fullerton Waste Management purchased land and a warehouse for $720,000. In addition to the purchase price, Fullerton made the following expenditures relate to the acquisition: broker's commission, $42,000; title insurance, $9,000; miscellaneous closing costs, $12,000. The warehouse was immediately demolished at a cost of $30,000 in anticipation of the building of a new warehouse. Determine the amounts Fullerton should capitalize as the cost of the land and the building.

Question

Business

Clarence Vincent

22 April, 20:40

Fullerton Waste Management purchased land and a warehouse for $720,000. In addition to the purchase price, Fullerton made the following expenditures relate to the acquisition: broker's commission, $42,000; title insurance, $9,000; miscellaneous closing costs, $12,000. The warehouse was immediately demolished at a cost of $30,000 in anticipation of the building of a new warehouse. Determine the amounts Fullerton should capitalize as the cost of the land and the building.

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Mario Pierce · Answer 1

Answer:$813,000

Explanation:

The cost of property plants and equipment in relation to IAS 16 includes the purchase price, related tax, transportation, professional fee, first insurance cost, and all other costs incurred to put the property in a position to be put into the desired use. The cost also includes all related miscellaneous cost.