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Bob the Builder purchased land as a factory site for $282,000. He paid $10,000 to tear...

Bob the Builder purchased land as a factory site for $282,000. He paid $10,000 to tear down two buildings on the land, and the salvage from these old buildings was sold for $1,350. Legal fees of $870 were paid for title investigation and making the purchase. Architect's fees were $10,300. Liability insurance during construction cost $650. Excavation costs were $2,610. A contractor was paid $600,000 to construct the new building. An assessment made by the city for pavement was $1,600. Interest costs during construction were $42,500. Assume that Bob prepares his financial statements based on IFRS. Determine the cost of land to be capitalized.

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Answer #1
Cost of Land
Amount in $
Factory Site        282,000
Add:Paid to Tear down           10,000
Less: Salvage            -1,350
Add: Legal fee                 870
Add: Assessment by city for pavement             1,600
Cost of land to be capitalized.       293,120
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