P, P, & E

Question 1

When capitalizing land, include:

Answer 1

Purchase price, closing costs such as legal fees and titles, and special government assessments

Question 2

When capitalizing buildings, include:

Answer 2

Purchase price, construction costs, interest on debt financing, remodeling costs

Question 3

Which depreciation method does not consider salvage value?

Answer 3

Double declining because the carrying value and asset will be completely depreciated prior to being able to take advantage of salvage value