Use the following information for questions 63 and 64.
Wilson Co. purchased land as a factory site for $900,000. Wilson paid $80,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance during construction cost $2,600. Excavation cost $10,440. The contractor was paid $2,800,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000.
-The cost of the building that should be recorded by Wilson Co. is

Question

Quizplus · Accepted Answer

The cost of the building should include the contractor's fee ($2,800,000), architect's fees ($31,200), excavation costs ($10,440), and interest costs during construction ($170,000). Adding these together gives $3,011,640. However, the correct total, considering all relevant costs provided in the question, is $3,014,240, indicating some costs were initially overlooked in the explanation. The correct calculation should include all costs directly related to the construction of the building, excluding land purchase and preparation costs that are not directly part of the building construction itself.

Use the Following Information for Questions 63 and 64