Splish Co. purchased land as a factory site for $592,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $62,160 to raze the old buildings and sold salvaged lumber and brick for $9,324. Legal fees of $2,738 were paid for title investigation and drawing the purchase contract. Splish paid $3,256 to an engineering firm for a land survey, and $100,640 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,220, and a liability insurance premium paid during construction was $1,332. The contractor's charge for construction was $4,055,200. The company paid the contractor in two installments: $1,776,000 at the end of 3 months and $2,279,200 upon completion. Interest costs of $251,600 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Splish Co. Assume that the land survey was for the building. Cost of the Land Cost of the Building $ LA $ LA 650244 4412028

Splish Co. purchased land as a factory site for $592,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $62,160 to raze the old buildings and sold salvaged lumber and brick for $9,324. Legal fees of $2,738 were paid for title investigation and drawing the purchase contract. Splish paid $3,256 to an engineering firm for a land survey, and $100,640 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,220, and a liability insurance premium paid during construction was $1,332. The contractor's charge for construction was $4,055,200. The company paid the contractor in two installments: $1,776,000 at the end of 3 months and $2,279,200 upon completion. Interest costs of $251,600 were incurred to finance the construction. Determine the cost of the land and the cost of the building as they should be recorded on the books of Splish Co. Assume that the land survey was for the building. Cost of the Land Cost of the Building $ LA $ LA 650244 4412028

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 46P

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