Shidan Apartments purchased an apartment building to rent to university students on November 18,2017.The following costs were incurred during 2017,before the tenants moved in: ?
$$\begin{array} { l r }
\text { Purchase price of the building } & \$ 220,000 \
\text { Purchase price of the land } & 100,000 \
\text { Transfer taxes } & 10,000 \
\text { Interest incurred on the mortgage loan to purchase } & 4,000 \
\text { Attorney and real estate agent's fees } & 15,000 \
\text { Repave the parking lot } & 6,000
\end{array}$$ How much will Shidan Apartments record as an asset?

Question

Shidan Apartments purchased an apartment building to rent to university students on November 18,2017.The following costs were incurred during 2017,before the tenants moved in: ?
$$\begin{array} { l r } 
\text { Purchase price of the building } & \$ 220,000 \
\text { Purchase price of the land } & 100,000 \
\text { Transfer taxes } & 10,000 \
\text { Interest incurred on the mortgage loan to purchase } & 4,000 \
\text { Attorney and real estate agent's fees } & 15,000 \
\text { Repave the parking lot } & 6,000
\end{array}$$ How much will Shidan Apartments record as an asset?

Quizplus · Accepted Answer

Shidan Apartments will record the total cost incurred before the tenants moved in as an asset. This includes the purchase price of $300,000, real estate agent fees of $6,000, legal fees of $3,000 and renovation costs of $42,000, for a total of $351,000. Therefore, the correct answer is C.

Shidan Apartments Purchased an Apartment Building to Rent to University