Randall Company bought real estate, on which there was an old office building, for $400,000. It paid $30,000 in cash as a down payment and signed an 8% mortgage for the remainder. It immediately had the old building razed at a net cost of $25,000. Attorneys were paid $8,000 in connection with the land purchase and an additional $4,000 in connection with permits and zoning variances necessary for Randall's new office building. $25,000 was paid for excavation for the basement of the new building, $1,600,000 was paid for construction of the new building, and $55,000 was paid for a parking lot and necessary walkways and driveways. For how much should the new office building be recorded?

Randall Company bought real estate, on which there was an old office building, for $400,000. It paid $30,000 in cash as a down payment and signed an 8% mortgage for the remainder. It immediately had the old building razed at a net cost of $25,000. Attorneys were paid $8,000 in connection with the land purchase and an additional $4,000 in connection with permits and zoning variances necessary for Randall's new office building. $25,000 was paid for excavation for the basement of the new building, $1,600,000 was paid for construction of the new building, and $55,000 was paid for a parking lot and necessary walkways and driveways. For how much should the new office building be recorded?

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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