SheffieldCo. purchased land as a factory site for $592,000. The process of tearing down two old buildings on the site and constructing the factory required6months.

The company paid $62,160to raze the old buildings and sold salvaged lumber and brick for $9,324. Legal fees of $2,738were paid for title investigation and drawing the purchase contract.Sheffieldpaid $3,256to an engineering firm for a land survey, and $100,640for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,220, and a liability insurance premium paid during construction was $1,332. The contractor's charge for construction was $4,055,200. The company paid the contractor in two installments: $1,776,000at the end of3months and $2,279,200upon completion. Interest costs of $251,600were incurred to finance the construction.

Determine the cost of the land and the cost of the building as they should be recorded on the books ofSheffieldCo. Assume that the land survey was for the building.

What is the Cost of the Land?

What is the cost of the building?