Question
On February 1, 2012, Badger Corporation purchased a parcel of land as a factory site for $50,000. An old building on the property was demolished,
On February 1, 2012, Badger Corporation purchased a parcel of land as a factory site for $50,000. An old building on the property was demolished, and construction began on a new building that was completed on December 12, 2012. Costs incurred during this period are listed below:
Demolition of old building | $ 10,000 |
Architect's fees | 26,000 |
Legal fees for title investigation |
|
and purchase contract | 3,000 |
Construction costs | 1,000,000 |
(Salvaged materials resulting from demolition were sold for $18,000.)
Badger should record the cost of the land and the cost of the new building, respectively, as
a. | $48,000 and $1,026,000 |
b. | $45,000 and $1,026,000 |
c. | $63,000 and $1,032,000 |
d. | $63,000 and $1,017,000 |
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