E9-13 Determining the cost of assets [5–10 min]
Ogden Furniture purchased land, paying $70,000 cash plus a $300,000 note
payable. In addition, Ogden paid delinquent property tax of $2,500, title insurance
costing $2,000, and $8,000 to level the land and remove an unwanted building. The
company then constructed an office building at a cost of $700,000. It also paid
$55,000 for a fence around the property, $18,000 for a sign near the entrance, and
$10,000 for special lighting of the grounds.
Requirements
1. Determine the cost of the land, land improvements, and building.
2. Which of these assets will Ogden depreciate?
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