Question 1 9 marks

Maldive Company completes construction of a building. The following independent items are the costs and other aspects relevant to the purchase of the lot and construction of the building:

Cash payments to contractor $100,000

Cash payment for building permit ... 3,000

Cost of land . 50,000

Cost to raze old building on land (gross) 20,000

Proceeds from old building salvage . 5,000

Utility bill for electricity used during construction 2,000

Advance payments for purchase of materials for

anticipated ordinary repairs 1,000

Capitalized interest on construction . 3,000

Required:

Compute the final recorded cost of the land.

Compute the final recorded cost of the building.

Instructions

Show all workings.

Round all calculations to the nearest dollar.

Assume a December 31 fiscal year end unless specifically stated otherwise