Question
21. The company purchased land with old building to develop and build a new building. The following expenditures and receipts are related to land, land
21. The company purchased land with old building to develop and build a new building. The following expenditures and receipts are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are enclosed in parentheses.
Money borrowed to pay building contractor (signed a note) | (12,000,000) |
Payment for construction from note proceeds | 12,000,000 |
Cost of land fill and clearing | 500,000 |
Delinquent real estate taxes on land assumed by purchaser | 700,000 |
Architects fee on building | 600,000 |
Cost of land purchased as a plant site | 15,000,000 |
Commission fee paid to land real estate agency | 750,000 |
Installation of temporary fences around building while construction is on going | 80,000 |
Cost of razing and removing building | 500,000 |
Proceeds from salvage of demolished building | (250,000) |
Cost of parking lots and driveways | 850,000 |
Cost of trees and shrubbery planted (permanent in nature) | 250,000 |
Excavation costs for new building | 3,500,000 |
What is the cost of New Building?
a. 4,430,000
b. 16,350,000
c. 16,930,000
d. 16,430,000
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