Martin Buber Co. purchased land as a factory site for $400,000. The process of tearing downtwo old buildings on the site and constructing the factory required 6 months. The companypaid $42,000 to raze the old buildings and sold salvaged lumber and brick for $6,300. Legalfees of $1,850 were paid for title investigation and drawing the purchase contract. MartinBuber paid $2,200 to an engineering firm for a land survey, and$68,000 for drawing thefactory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,500, and a liability insurance premium paid duringconstruction was $900. The contractor's charge for construction was $2,740,000. Thecompany paid the contractor in two installments:$1, 200, 000 at the end of 3 months and $1,540,000 upon completion. Interest costs of $170, 000 were incurred to finance theconstruction. Determine the cost of the land and the cost of the building as they should berecorded on the books of Martin Buber Co. Assume that the land survey was for the building.

Fixed assets: These are the assets which were used in the business for more than one year. These…

insurance on the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor's charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at the end of 3 months and $ 1,540,000 upon completion. Interest costs of $170, 000 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buber Co. Assume that the land survey was for the building.

insurance on the property cost $1,500, and a liability insurance premium paid during construction was $900. The contractor's charge for construction was $2,740,000. The company paid the contractor in two installments: $1,200,000 at the end of 3 months and $ 1,540,000 upon completion. Interest costs of $170, 000 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buber Co. Assume that the land survey was for the building.

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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