Practice Part II (40 Points) Section A: Cost of Land and Building Rams Company purchased land as a factory site for $ tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,500 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400, and liability insurance $10,500. $17,000. 900,000. Rams Company paid $80,000 to during construction cost $2,600. Excavation cost The contractor was paid $2,000,000. Interest costs capitalized during construction were The cost of the land that should be recorded by the Rams Company is A. $986,480. B. $985,900. I. C. $980,500 D. $972,600. 2. The cost of the building that should be recorded by the Rams Company is A. $2,061,300. B. $2,063,700 C. $2,138,300. D. $2,143,700. Section B: Subsequent Expenditures ASU Company plant asset book value is $700,000 (cost $1,000,000 less accumulated depreciation of $300,000). Prepare the journal entries to record the following expenditures. S60.000. The cost of the old A. The electrical system was completely updated at a cost of electrical system was not known. It is estimated that the useful life of the plant asset will increase by 10 years. B. The entire plant was repainted at a cost of $15,000. C. The roof was removed and replaced with a more modern roof at a cost of $75,000. Book value of the old roof was $30,000. Section B: Subsequent Expenditures ASU Company plant asset book value is $700,000 (cost $1,000,000 less accumulated depreciation of $300,000). Prepare the journal entries to record the following expenditures. A. The electrical system was completely updated at a cost of $60,000. The cost of the old electrical system was not known. It is estimated that the useful life of the plant asset will increase by 10 years. B. The entire plant was repainted at a cost of $15,000. C. The roof was removed and replaced with a more modern roof at a cost of $75,000. Book value of the old roof was $30,000