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CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 45P

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A company purchased land for HK$80,000 cash. Real estate brokers' comr was HK$5,000 and HK$7,000
was spent to demolish an old building on the before construction of a new building could start. The cost
recorded for thSelect one: a. HK$92,000. b. HK$80,000. C. HK$87,000. d. HK$85,000. Next

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A company purchased property for a building site. The costs associated with the property were: Purchase price $175,000 Real estate commissions 15,000 Legal fees. Expenses of clearing the land Expenses to remove old building 800 2,000 1,000 What portion of these costs should be allocated to the cost of the land and what portion should be alloca the cost of the new building? $175,800 to Land; $18,800 to Building O $190,000 to Land; $3,800 to Building $190,800 to Land; $1,000 to Building O $192,800 to Land; $0 to Building O $193,800 to Land; $0 to Building
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