Answer:
Total value of property = $140,000
Explanation:
Provided information we have,
Original cost of property = $160,000
25 % of such property = Land
Note: Depreciation expense is not charged on land, as the asset is not depreciated. Land tends to increase it's value rather than decrease.
Value of land = $160,000 [tex]\times[/tex] 255 = $40,000
Value of remaining property to be depreciated = $160,000 - $40,000
= $120,000
Depreciation for year 1 = $20,000
Value of property except land at end of year 1 = $120,000 - $20,000 = $100,000
Total value of property including land on cost basis = $100,000 + $40,000 = $140,000
Cost basis is the basis in which assets are shown at cost value less depreciation if any.
Here, thus, total value of property = $140,000
