Question
On July 1, 2021, Swanson Corporation purchased a parcel of land as a factory site for $300,000. An old building on the property was demolished
On July 1, 2021, Swanson Corporation purchased a parcel of land as a factory site for $300,000.
An old building on the property was demolished and construction began on a new warehouse that was completed on October 15, 2021. Costs incurred on the construction project are listed below.
Cost of building construction $750,000
Title insurance 1,500
Cost of constructing a driveway. 8,000
Legal fees to purchase land. 5,000
Architects fees. .. 20,000
Cost of demolishing the old building.. 7,500
Proceeds from salvaged materials from building demolition.. (2,500)
Delinquent property taxes, January 1- June 30, 2021.... 3,000
Interest during construction on the construction loan.. 12,000
Cost of parking lot and fencing 70,000
Cost of grading and filling the land.. 9,000
Excavation costs 50,000
Required:
Determine the cost of the land, the building and the land improvements. Please show your
work
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