On February 1, 2010, Morgan Company purchased a parcel of land as a factorysite for $200,000. An old building on the property was demolished, andconstruction began on a new building which was completed on November 1,2010. Costs incurred during this period are listed below:$20,000 - Demolition of old building$35,000 - Architect's fees$5,000 - Legal fees for title investigation and purchase contract.$1,090,000 - Construction costsSalvaged materials resulting from demolition were sold for $10,000.Morgan should record the cost of the land and new building, respectively, as:$225,000 and $1,115,000$210,000 and $1,130,000$210,000 and $1,125,000$215.000 and $1.125.000

The costs associated with the land include the purchase price of the land, the cost of demolishing…

Answered: On February 1, 2010, Morgan Company…

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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