IBM acquired land and a building for a purchase price of $2,290,000. Before purchasing, they paid...

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IBM acquired land and a building for a purchase price of$2,290,000. Before purchasing, they paid $30,000 for an appraisalthat determined the fair value of the land as $756,000 and thebuilding as $1,944,000. Additionally, IBM incurred a closing costof $180,000 to complete the transfer. Two days after completion ofthe transfer, the building had a leak that required $75,000 worthof damage to be repaired.
What is the acquisition cost that would be capitalized,individually, to the land and building accounts? Provide referencesto support why each cost, beyond the purchase price, is included orexcluded in the total cost to be capitalized for each asset.

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Calculation of capitalization cost to the plant and building Purchase price of the building 2290000 apprisal to determine fair value 30000 closing cost paid 180000 Total cost to be capitalized 2500000 229000030000180000 Purchase price of the See Answer

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