The Italian Bread Company purchased land as a factory site for $65,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Property taxes on the land (for the first year) Building construction costs Interest costs related to the construction Required: $ 8,500 (1,200) 17,500 2,500 3,500 550,000 20,500 Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Purchase price of land Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Building construction costs Interest costs related to the construction Totals Land Building $ 65,000 $ 17,500 2,500 550,000 20,500 $ 67,500 $ 588,000
The Italian Bread Company purchased land as a factory site for $65,000. An old building on the property was demolished, and construction began on a new building. Costs incurred during the first year are listed as follows: Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Property taxes on the land (for the first year) Building construction costs Interest costs related to the construction Required: $ 8,500 (1,200) 17,500 2,500 3,500 550,000 20,500 Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be indicated by a minus sign.) Purchase price of land Demolition of old building Sale of salvaged materials Architect fees (for new building) Legal fees (for title investigation of land) Building construction costs Interest costs related to the construction Totals Land Building $ 65,000 $ 17,500 2,500 550,000 20,500 $ 67,500 $ 588,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Italian Bread Company purchased land as a factory site for $65,000. An old building on the property was demolished, and
construction began on a new building. Costs incurred during the first year are listed as follows:
Demolition of old building
Sale of salvaged materials
Architect fees (for new building)
Legal fees (for title investigation of land)
Property taxes on the land (for the first year)
Building construction costs
Interest costs related to the construction
Required:
$ 8,500
(1,200)
17,500
2,500
3,500
550,000
20,500
Determine the amounts that the company should record in the Land and the Building accounts. (Amounts to be deducted should be
indicated by a minus sign.)
Purchase price of land
Demolition of old building
Sale of salvaged materials
Architect fees (for new building)
Legal fees (for title investigation of land)
Building construction costs
Interest costs related to the construction
Totals
Land
Building
$
65,000
$
17,500
2,500
550,000
20,500
$
67,500 $
588,000
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