Sparky, Co. purchased land as a factory site for $500,000. Sparky paid $16,000 to tear down an existing building on the land to make room for the factory. Sparky was able to salvage some of the materials from the razed building and sold them for $5,400. Legal fees of $12,880 were paid for title insurance on the land purchase. An architect was hired to design the factory and Sparky paid fees of $52,200 for this service. There was an assessment by the city for a drainage project that cost $13,900. Excavation costs totaled $17,440. The contractor was paid $2,200,000 for the construction of the factory. Liability insurance during construction cost $21,600. Interest costs during construction were $112,000. The original cost of the Building that should be reported by Sparky is: O $2,416,080 O $2,403,200 O $2,385,760 O $2,364,160

Sparky, Co. purchased land as a factory site for $500,000. Sparky paid $16,000 to tear down an existing building on the land to make room for the factory. Sparky was able to salvage some of the materials from the razed building and sold them for $5,400. Legal fees of $12,880 were paid for title insurance on the land purchase. An architect was hired to design the factory and Sparky paid fees of $52,200 for this service. There was an assessment by the city for a drainage project that cost $13,900. Excavation costs totaled $17,440. The contractor was paid $2,200,000 for the construction of the factory. Liability insurance during construction cost $21,600. Interest costs during construction were $112,000. The original cost of the Building that should be reported by Sparky is: O $2,416,080 O $2,403,200 O $2,385,760 O $2,364,160

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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