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: 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 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 bax should be blank, enter a zero. Land Building Purchase price of land Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total 2. If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statements?

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: 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 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 bax should be blank, enter a zero. Land Building Purchase price of land Demolition of old building Architect's fees Legal fees Construction costs Salvaged materials Total 2. If management misclassified a portion of the building's cost as part of the cost of the land, what would be the effect on the financial statements?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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