On January 6,Year 1,Mount Jackson Corporation purchased a tract of land for a factory site for $1,500,000.An existing building on the site was demolished and the new factory was completed on October 11,Year 1.Additional cost data are shown below:

Which of the following are the capitalized costs of the land and the new building,respectively?

Question

On January 6,Year 1,Mount Jackson Corporation purchased a tract of land for a factory site for $1,500,000.An existing building on the site was demolished and the new factory was completed on October 11,Year 1.Additional cost data are shown below:

Which of the following are the capitalized costs of the land and the new building,respectively?

Quizplus · Accepted Answer

Cost of land = Purchase price of $1,500,000 + Realtor's and attorney's fees of $15,400 fees + Cost to demolish old building of $133,200 - Salvage recovery from old building of $11,000 = $1,637,600 cost of land
Cost of building = Construction cost of $1,760,000 + Architect's fees of $138,000 = $1,898,000

On January 6,Year 1,Mount Jackson Corporation Purchased a Tract of Land