In 2012, Kadmen Ltd. incurred the following transactions related to the purchase of a property. Assume all transactions are for cash unless otherwise stated.

Jan. 22 Purchased real estate for a future plant site for $440,000, paying $110,000 cash and signing a mortgage payable for the balance. There was an old building on the site. The fair values of the land and building were $340,000 and $100,000, respectively.

24 Paid $9,000 for legal fees on the real estate purchase.

31 Paid $50,000 to demolish the old building to make room for the new plant.

Feb. 13 Graded and filled the land at a cost of $16,000 in preparation for the construction.

28 Received $15,000 for residual materials from the demolished building.

Mar. 14 Paid $68,000 in architect fees for the building plans.

31 Paid the local municipality $10,000 for building permits and $20,000 for the 2012 property taxes.

Apr. 22 Excavation costs for the new building were $34,000.

June 15 Received a bill from the building contractor for half of the cost of the new building, $600,000.

Sept. 14 Paid $150,000 in cash and signed a bank loan payable for the balance.

Oct. 12 Received a bill for the remaining $600,000 owed to the building contractor for the construction of the new building. Paid $200,000 cash and signed a bank loan payable for the balance.

20 Paved the parking lots, driveways, and sidewalks for $84,000. Installed a fence for $16,000.

Instructions

(a) Record the transactions.

(b) Determine the cost of the land, land improvements, and building that will appear on Kadmen's December 31, 2012, statement of financial position.

(c) When will depreciation on the items recorded above begin?

(d) Under IFRS, would the company have the option of not depreciating any of these assets? Under ASPE?