Chapter 10 Flashcards by Conner Hansen

Q

Define Capitalize:

A

It goes on the balance sheet towards the value of the asset

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Q

What is generally capitalized

A

Cash/Cash equivalent price of obtaining the asset and getting it completely ready for use.

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Q

Land Capitalization includes:

A

Purchase price
Closing costs (title, legal fees)
Assumption of liens, mortgages, or encumbrances
Cost to get land ready for use
Improvements with an indefinite life

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