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Chapter 10 Acquisition and Disposition of Property, Plant and Equipment On July 1, 2018, Forward Corporation...

Chapter 10 Acquisition and Disposition of Property, Plant and Equipment

On July 1, 2018, Forward Corporation purchased a parcel of land as a factory site for $185,000. An old building on the property was demolished and construction began on a new warehouse that was completed on October 15, 2018. Costs incurred on the construction project are listed below.

               Cost of building construction…………………………………          $620,000

               Title insurance…………………………………………………               1,500

               Cost of constructing a driveway……………………………….               8,000

               Legal fees to purchase land…………………………………….              1,000

               Architect’s fees…………………………………………. ……..            20,000

               Cost of demolishing the old building…………………………..              8,500

               Proceeds from salvaged materials from building demolition…..            (1,200)

               Delinquent property taxes, January 1- June30, 2016……………            3,000

               Interest during construction on the construction loan…………..           12,000

               Cost of parking lot and fencing…………………………………           10,000

               Cost of grading and filling the land……………………………..             9,000

               Excavation costs…………………………………………………          30,000

Determine the cost of the land, the building and the land improvements. Please show work as to how you arrived at your answer.

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