On February 1, 2019, Edwards Corporation purchased a parcel of land as a factory site for $120,000. It demolished an old building on the property and began construction on a newbuilding that was completed on October 2, 2019. Costs incurred during this period are:Demolition of old building$ 10,000Architect's fees20,000Legal fees for title investigation and purchase contract4,000Construction costs625,000Edwards 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 box should be blank, enter a zero.LandBuildingPurchase price of landDemolition of old buildingArchitect's feesLegal feesConstruction costsSalvaged materialsTotal2. Next Level 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?

General points - All the costs incurred in related to build a building should be capitalized to the…

Answered: On February 1, 2019, Edwards…

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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