Hollow Company incurred the following expenditures related to the construction of a new home office: Fair value of land Legal fees, including fee for title search Payment of land mortgage and related interest due at time of sale Payment of delinquent property taxes assumed Cost of razing the apartment building Grading and drainage on land site Architect fee on new building Payment to building contractor Payment of medical bills of employees accidentally injured while inspecting building construction Cost of paving driveway and parking lot Cost of trees, shrubs and other landscaping Cost of installing lights in parking lot Premium of insurance on building during construction Cost of open house to celebrate opening of building Requirements: 1) What amount should be reported as cost of land? 2) What amount should be reported as cost of new building? 3) What amount should be reported as cost of land improvement? 1,797,000.00 6,000.00 45,000.00 14,000.00 23,000.00 7,000.00 191,000.00 7,990,000.00 8,000.00 37,000.00 51,000.00 19,000.00 53,000.00

Hollow Company incurred the following expenditures related to the construction of a new home office: Fair value of land Legal fees, including fee for title search Payment of land mortgage and related interest due at time of sale Payment of delinquent property taxes assumed Cost of razing the apartment building Grading and drainage on land site Architect fee on new building Payment to building contractor Payment of medical bills of employees accidentally injured while inspecting building construction Cost of paving driveway and parking lot Cost of trees, shrubs and other landscaping Cost of installing lights in parking lot Premium of insurance on building during construction Cost of open house to celebrate opening of building Requirements: 1) What amount should be reported as cost of land? 2) What amount should be reported as cost of new building? 3) What amount should be reported as cost of land improvement? 1,797,000.00 6,000.00 45,000.00 14,000.00 23,000.00 7,000.00 191,000.00 7,990,000.00 8,000.00 37,000.00 51,000.00 19,000.00 53,000.00

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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