Ardvark Co$.$ is building a new factory. Land was purchased for $$500,000$ as a factory site. The process of tearing down

two buildings on the site need to be removed before beginning constructiion which is estimated to take $6$ months.

Demolish of the old building $$60,000$ and salvaged lumber and bricksold for $$9,400.$ The title comapny received legal

fees of $$3,900$ for title investigation and drafting the purchase contract. Ardvark paid $$3,500$ for a land survey and

$$56,000$ for drawing the factory plans to an engineering firm. Title insurance on the land cost $$5,900$ and liability

insurance of $$1,400$ for liability insurance. The building contractor received payments in two installments: $$1,550,000$ at

the end of $3$ months and $$1,770,000$ upon completion. Interest costs of $$230,000$ were incurred to finance the

construction.

Requirements

Determine the cost of the land and the cost of the building as they should be recorded on the books of Ardvarkr Co$.$

Assume that the land survey was for the building.

Cost of land

Cost of building