Use the following to answer questions 1 4

ASD Company purchased land as a factory site. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed below:

Land purchased as a factory site $985,600

Building construction costs 3,158,600

Interest cost related to the construction 90,000

Demolition of old building 65,000

Title investigation of land 12,500

Property taxes on land (for the next year) 36,500

Architect fees (for new building) 96,300

Sale of salvaged materials 37,400

1. $__________How much of the property taxes on the land for the next year should be capitalized in the Land account?

2. How should the sale of salvaged materials be recorded?

A. As an added cost of the land

B. As a reduction of the cost of the land

C. As an added cost to the building

D. As a reduction of the cost of the building

3. $___________What amount should be recorded to the Land account?

4. $___________What amount should be recorded to the Building account?