Use the following to answer questions 1 4

J&T 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	$450,000
Building construction costs	1,750,000
Interest cost related to the construction	80,000
Demolition of old building	45,000
Title investigation of land	11,000
Property taxes on land (past due for last year)	5,700
Property taxes on land (for the next year)	6,100
Architect fees (for new building)	32,000
Sale of salvaged materials	18,000

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?