Acquisition of Land and Building On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2019. Costs incurred during this period are: Demolition of old building $ 10,000 Architect's fees 20,000 Legal fees for title investigation and purchase contract 5,000 Construction costs 625,000 Edwards sold salvaged materials resulting from the demolition for $2,000. Required: 1. At what amount should Edwards record the cost of the land and the new building, respectively? If an input box should be blank, enter a zero. Land Land Building Purchase price of land Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total 2. Next Level 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? n of Land and Building ary 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a new building that was on October 2, 2019. Costs incurred during this period are: n of old building $ 10,000 sfees 20,000 for title investigation and purchase contract 5,000 ion costs 625,000 sold salvaged materials resulting from the demolition for $2,000. amount should Edwards record the cost of the land and the new building, respectively? box should be blank, enter a zero. Land Building = price of land on of old building 's fees The initial amount reported for property, plant and equipment would be correctly stated, but property, plant and equipment would be understated in future periods. Future income statements would overstate depreciation expense and overstate shareholders' equity. Future income statements would overstate net income and property, plant and equipment would be overstated in future periods. The initial amount reported for property, plant and equipment would be correctly stated; if the company chooses straight-line depreciation property, plant and equipment would be correctly stated in future periods. Level 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