A company purchases a remote site building for computer operations. The building will be suitable for operations after some expenditures. The wiring must be replaced to computer specifications. The roof is leaky and must be replaced. All rooms must be repainted and recarpeted and there will also be some plumbing work done. Which of the following statements is true?
A) The cost of the building will not include the repainting and recarpeting costs.
B) The cost of the building will include the cost of replacing the roof.
C) The cost of the building is the purchase price of the building while the additional expenditures are all capitalized as Building Improvements.
D) The wiring is part of the computer costs not the building cost.

Question

Quizplus · Accepted Answer

The cost of the building includes all expenditures necessary to make the building ready for its intended use, which includes replacing the roof to ensure the building is structurally sound and protected from the elements.

A Company Purchases a Remote Site Building for Computer Operations