Sunset Co. Acquired land with old building for 6,000,000. After the acquisition, Sunset Co. Demolished the old structure and started the construction of a new building. Sunset Co. Incurred the following additional costs. Fimder's fee of real estate agent 80,000 Land registration cost 8,000 Unpais taxes on land prior to acquisition date 200,000 Taxes paid on property after acquisition date 60,000 Demolition cost of old building 130,000 Materials, labor and overhead on construction of new building 10,000,000 Salvaged materials from the demolition were sold for 10,000. Case 1: the land and the old building have fair values of 5,425,000 and 775,000, respectively . Provide the journal entries. Case 2: the old building is unusable and has no fair value. Provide the journal entries.
Sunset Co. Acquired land with old building for 6,000,000. After the acquisition, Sunset Co. Demolished the old structure and started the construction of a new building. Sunset Co. Incurred the following additional costs.
Fimder's fee of real estate agent 80,000
Land registration cost 8,000
Unpais taxes on land prior to acquisition date 200,000
Taxes paid on property after acquisition date 60,000
Demolition cost of old building 130,000
Materials, labor and
Salvaged materials from the demolition were sold for 10,000.
Case 1: the land and the old building have fair values of 5,425,000 and 775,000, respectively . Provide the
Case 2: the old building is unusable and has no fair value. Provide the journal entries.
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