1/ On July 1, 2018, Larkin Co. purchased a $440,000 tract of land that is intended to be the site of a new office complex. Larkin incurred additional costs and realized salvage proceeds during 2018 as follows:

Demolition of existing building on site	$	67,000
Legal and other fees to close escrow		12,900
Proceeds from sale of demolition scrap		9,500

What would be the balance in the land account as of December 31, 2018?

Multiple Choice

• $507,000.

• $510,400.

• $519,900.

• $440,000.

2/ On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows:

January 1, 2018	$	343,000
September 1, 2018	$	501,000
December 31, 2018	$	501,000
March 31, 2019	$	501,000
September 30, 2019	$	343,000

Dreamworld had $6,700,000 in 14% bonds outstanding through both years. The average accumulated expenditures for 2019 by the end of the construction period was:

Multiple Choice

• $1,750,400.

• $2,189,000.

• $1,416,400.

• $1,092,250.