Exercise 10-1 Acquisition costs; land and building [LO10-1]

On March 1, 2018, Beldon Corporation purchased land as a factory site for $73,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2018. Costs incurred during this period are listed below:

Demolition of old building $ 5,500

Architects fees (for new building) 12,000

Legal fees for title investigation of land 2,000

Property taxes on land (for period beginning March 1, 2018) 4,300

Construction costs 630,000 Interest on construction loan 6,500

Salvaged materials resulting from the demolition of the old building were sold for $3,300.

Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building.

COST OF LAND-

Capitalized cost of land:
Purchase Price
Demolition of old building
Sale of materials
Legal fees for title investigation
Total cost of land	$0

NEW BUILDING

Capitalized cost of Building
Construction Costs
Architects fees
Interest on construction loan
Legal fees for title investigation
Total cost of building	$0