Problem Cost of Building

Wilson Co. purchased land as a factory site for $150,000. Wilson paid $85,000 to tear down two buildings on the land. Salvage was sold for $5,000. Legal fees of $4,000 were paid for title investigation and making the purchase. Architect's fees were $25,000. Title insurance cost for the land $2,000, and liability insurance during construction cost $1,500. Excavation cost $12,000. The contractor was paid $3,500,000. Interest costs during construction were $35,000.

A. The cost of the building that should be recorded by Wilson Co. is $

Problem Cost of Land & Building

On February 1, 2020, Nelson Corporation purchased a parcel of land as a factory site for $320,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2020. Costs incurred during this period are listed below:

Demolition of old building $ 25,000

Architect's fees 35,000

Legal fees for title investigation and purchase contract 5,000

Construction costs 1,590,000

(Salvaged materials resulting from demolition were sold for $20,000.)

B. Nelson should record the cost of the land as $

C. Nelson should record the cost of the building as $