Mars Corporation hired an engineering firm to design and a construction company to build a new manufacturing facility on their existing land. The following costs were incurred: Construction company payment: $450,000 Engineering design fees: $25,000 Building permits: $2,500 Property taxes during construction: $1,500 Fire insurance for first year of operation: $4,500 Property taxes for first year of operation: $8,000 What is the total acquisition cost of the new manufacturing facility? a. $491,500 b. $479,000 c. $450,000 d. $487,500

Mars Corporation hired an engineering firm to design and a construction company to build a new manufacturing facility on their existing land. The following costs were incurred: Construction company payment: $450,000 Engineering design fees: $25,000 Building permits: $2,500 Property taxes during construction: $1,500 Fire insurance for first year of operation: $4,500 Property taxes for first year of operation: $8,000 What is the total acquisition cost of the new manufacturing facility? a. $491,500 b. $479,000 c. $450,000 d. $487,500

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3RE: Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is...

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Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?
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