Cost of Tangible Capital Assets}

Mooney Sounds, a local stereo retailer, needed a new store because it had outgrown the leased space it had used for several years. Mooney acquired and remodelled a former grocery store. As a part of the acquisition, Mooney incurred the following costs:

\section*{Required:}
1. Determine the cost of the land and the building.
2. CONCEPTUAL CONNECTION If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statements?
\section*{Exercise

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Cost of grocery store $277,400 Wire and electrical supplies $ 4,290 Cost of land (on which the New doors 6,400 grocery store is located) 83,580 New windows 3,850 New roof for building 74,000 Wages paid to workers for remodelling 12,500 Lumber used for remodelling 23,200 Additional inventory purchased for grand Paint 515 opening sale 45,300