Acquisition of Land and Building On February 1, 2016, Edwards Corporation purcha

Question

Acquisition of Land and Building

On February 1, 2016, Edwards Corporation purchased a parcel of land as a factory site for $100,000. It demolished an old building on the property and began construction on a new building that was completed on October 2, 2016. Costs incurred during this period are:

Edwards sold salvaged materials resulting from the demolition for $2,000.

Required:

1. At what amount should Edwards record the cost of the land and the new building, respectively?

If an input box should be blank, enter a zero.

Demolition of old building $ 8,000 Architect’s fees 25,000 Legal fees for title investigation and purchase contract 4,000 Construction costs 650,000

Explanation / Answer

Land Building Purchase price of land 100000 Demolition of old building 8000 Architect's fees 25000 Legal fees 4000 Construction costs 650000 Salvaged materials -2000 Total 110000 675000

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