On February 1,2017,Ursa Corporation purchased a parcel of land as a factory site for $100,000.It demolished an old building on the property and began construction on a new building that was completed on October 2,2017.Costs incurred during this period are:
In addition,Ursa sold salvaged materials resulting from the demolition for $2,000.
Required:
a.At what amount should Ursa record the cost of the land and the new building,respectively?
b.If management misclassified a portion of the building's cost as part of the cost of the land,what
would be the effect on the financial statements?

Question

On February 1,2017,Ursa Corporation purchased a parcel of land as a factory site for $100,000.It demolished an old building on the property and began construction on a new building that was completed on October 2,2017.Costs incurred during this period are:
  In addition,Ursa sold salvaged materials resulting from the demolition for $2,000.
Required:
a.At what amount should Ursa record the cost of the land and the new building,respectively?
b.If management misclassified a portion of the building's cost as part of the cost of the land,what
would be the effect on the financial statements?

Quizplus · Accepted Answer

The Answer of On February 1,2017,Ursa Corporation purchased a parcel of land as a factory site for $100,000.It demolished an old building on the property and began construction on a new building that was completed on October 2,2017.Costs incurred during this period are:
  In addition,Ursa sold salvaged materials resulting from the demolition for $2,000.
Required:
a.At what amount should Ursa record the cost of the land and the new building,respectively?
b.If management misclassified a portion of the building's cost as part of the cost of the land,what
would be the effect on the financial statements?

On February 1,2017,Ursa Corporation Purchased a Parcel of Land as a Factory