Question 7 (6 points) February 1, 2016, Alpha Company purchased land for the fut

Question

Question 7 (6 points)

February 1, 2016, Alpha Company purchased land for the future factory location at a cost of $50,000.  The dilapidated building that was on the property was demolished so that construction could begin on the new factory building. The new factory was completed on November 1, 2016. Costs incurred during this period were:

Item

Amount

Demolition dilapidated building

$4,500

Architect Fees

$9,750

Legal Fees - for title search

$2,500

Interest During Active Construction Period

$17,500

Construction Costs

$510,000

Using this information, how much should be recorded as the cost of: (Enter only whole dollar values.)

1. Land

2. New Building

Item

Amount

Demolition dilapidated building

$4,500

Architect Fees

$9,750

Legal Fees - for title search

$2,500

Interest During Active Construction Period

$17,500

Construction Costs

$510,000

Explanation / Answer

Item Land Building

Land Cost $50,000

Demolition Cost 4,500

Architect Fees $9,750

Legal Fees - title search 2,500

Interest During Active Construction Period 17,500

Construction Costs 510,000

Total $57,000 $537,250

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