Fisk Manufacturing purchases a large lot on which and old building is located as
ID: 2351211 • Letter: F
Question
Fisk Manufacturing purchases a large lot on which and old building is located as a part of its plans to build a new plant. The negotiated purchase price is $209,000 for the lot plus $104,000 for the old building. The company pays $40,400 to tear down the old building and $59,722 to fill and level the lot. It also pays a total of $1,663,150 in construction costs- this amount consists of $1.564.400 for the new building and $98,750 for lighting and paving a parking area next to the building. Prepare a single journal entry to record these costs incurred by Fisk, all of which are paid in cash.*Please explain how you get your answer and make sure that it is 100% correct.
Thank you
Explanation / Answer
he cost of land would include all costs of purchasing and preparing the land for use. So the total cost of land would be: 209,000 Lot price + 104,000 Since it was will be torn down, it is included as the cost of land + 40,400 Tear down old building. Preparing the land for use. + 59,722 Fill and level. Preparing the land for use. $413,122 Total cost of land.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.