Homework Answers
Total acquisition cost = purchase cost + brokers commission + title insurance + miscellaneous closing costs
= $660000 + $36000 + $6000 + $9000
= $711000
now,
Capitalized cost of land = {$711000/($456000 + $304000)} x $456000
= $426600
Capitalized cost of building = {$711000/($456000 + $304000)} x $304000
= $284400
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