Answer to Question #250150 in Economics for Aaisha

Question

Busi Ngidi is the sole proprietor of Ngidià ¢ € ™s Clothing Manufacturers which was
renting property in an industrial park. To expand her operations, Ngidià ¢ € ™s
purchased its own property, demolish the old building, construct a new building
and install new equipment. The following costs were made available Ignore VAT
implications: (2)
Equipment R
Purchase price of equipment
Cost of transport and installation of equipment
Fine paid for illegal transport of equipment
400 000
70 000
10 00

Property R
Purchase price of property
Legal and transfer fees
Cost of demolishing old building
Proceeds from sale of old building material
Architectà ¢ € ™s and engineersà ¢ € ™ fees
Cost of construction of new building
840 000
21 000
30 000
9 000
16 000
502 000

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

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