Understanding Expenditures Subsequent to Acquisition for a Building

Which of the following would be considered "expenditures subsequent to acquisition" for a building?

A) Initial purchase cost
B) Routine maintenance costs
C) Depreciation expenses
D) Property taxes

Final answer:

Expenditures subsequent to acquisition for a building include routine maintenance costs and property taxes. They represent costs incurred after the initial purchase and contribute to the ongoing functionality and legality of owning a building. Initial purchase cost and depreciation are not subsequent expenditures.

Explanation:

The question regarding expenditures subsequent to acquisition for a building refers to costs that are incurred after the initial purchase of the building. These are expenses that arise throughout the ownership of the property and contribute to its value or extend its useful life. The correct answer is:

• Routine maintenance costs: These are costs associated with the regular upkeep of the building to maintain its functionality and appearance. Such costs are necessary over the life of the building to ensure it remains in good working condition.
• Property taxes: Taxes levied on the property by local governments are considered as expenditures after the purchase of the building. Though they do not improve the value of the property, they are a necessary expense for property owners.

Options A, the initial purchase cost, and C, depreciation expenses, are not considered subsequent expenditures. The initial purchase cost is a one-time expense incurred at the time of acquiring the building, whereas depreciation is an accounting method to allocate the cost of the building over its useful life, not an actual cash outlay.