Homework Answers
Answer:
Computation of the book value of the property at the end of year 2:
| Building | 99000 | |
| Less: Accumulated depreciation (9900 x 2 years) | (19800) | 79200 |
| Land | 135000 | |
| Net book value | 214200 |
Working Notes:
Accumulated depreciation =99000*1/10 =9900
| Building | Land | |
| Cash paid | 76000 | 121000 |
| + renovations to prepare for use | 19000 | |
| + share of transfer costs | 4000 | 14000 |
| 99000 | 135000 |
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