Problem 3

Capitalization of Fixed Assets

Seiler Co. purchased land as a factory site for $600,000. Seiler paid $60,000 to tear down two buildings on the land. Salvage was sold for $5,400. Legal fees of $3,480 were paid for title investigation and making the purchase. Architect's fees were $31,200. Title insurance cost $2,400 and liability insurance during construction cost $2,600. Payment of the prior owner's real estate taxes, which represented a lien, a mounted to $22,850. Excavation cost $10,440. The contractor was paid $2,200,000. An assessment made by the city for pavement was $6,400. Interest costs during construction were $170,000. Parking lots and driveways were put place, at a value of $6,700.

Compute the value of land, buildings, and land improvements.