Tien purchases an office building for $400,000, paying a $75,000 cash down payment and borrowing $325,000 from Atlantic Meridian Mortgage Co. The purchase price is properly allocated as 90 percent to the building and 10 percent to the land. Two years after the purchase, Tien remodels one floor of the building at a cost of $25,000. Annual maintenance costs and property taxes total $4,000. A total depreciation of $36,000 is deducted over 3 years. Determine the adjusted basis of the building and the land as of the end of the 3 years.
A. $56,500 for building; $7,500 for land
B. $89,000 for building; $10,000 for land
C. $346,500 for building; $42,500 for land
D. $349,000 for building; $40,000 for land
E. $353,000 for building; $40,000 for land
Answer: D
You might also like to view...
Explain why it is important to have many “pictures” of yourself when you attempt to strengthen your self-concept.
What will be an ideal response?
The closing stock price of MNM Corporation for the last 7 trading days is shown below. Day Stock Price 1 24 2 27 3 24 4 28 5 25 6 30 7 31 ? The variance is
A. 2.828. B. 2.618. C. 8. D. 6.857.
Under Rule 201, what best describes how an AIPCA member should act?
a. With professional competence. b. With due professional care. c. After adequate planning and with appropriate supervision. d. All of the above
An agreement involving two or more firms with complementary core competencies to jointly contribute to the supply chain is referred to as a(n) ______________________________
Fill in the blank(s) with correct word