Question

On February 1, 2020, Coronado Industries purchased a parcel of land as a factory site for...

On February 1, 2020, Coronado Industries purchased a parcel of land as a factory site for $325000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below:

Demolition of old building $ 21300
Architect's fees 33900
Legal fees for title investigation and purchase contract 5400
Construction costs 1379000
(Salvaged materials resulting from demolition were sold for $9600.)


Coronado should record the cost of the land and new building, respectively, as

$342100 and $1412900.
$336700 and $1412900.
$351700 and $1403300.
$336700 and $1418300.
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Answer #1
Answer
Particulars Calculating the cost of the land

Calculating Cost of

New Building
Add : Factory site cost $ 3,25,000 -
Add : Demolition of old building $ 21,300 -
Add : Architect's fees - $ 33,900
Add : Legal fees $ 5,400 -
Add : Construction costs - $ 13,79,000
Less : Salvaged materials ($ 9,600) -
Total $ 3,42,100 $ 14,12,900
Coronado should record the cost of the land and new building, respectively, as $ 3,42,100 and $ 14,12,900.
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