Answer to Question #246934 in Economics for TINA

Question

Purchase price of property 840000

Legal and transfer fees 21000

Cost of demolishing old building 30000

Proceeds from sale of old building material 9000

Architect’s and engineers’ fees 16000

Cost of construction of new building 502000

Determine which one of the following amounts represents the total capitalised cost of

the asset, property.

A) R1 400 000

B) R1 363 000

C) R1 418 000

D) R1 379 000

Answer 1

The total capitalised cost of the asset, property is:

$TCC = 840,000 + (21,000 + 30,000 + 16,000 + 502,000 - 9,000) = 1,400,000.$

So, the correct answer is A).