The Italian Pizza Company purchased land as a factory site for $90,000. Prior to construction of the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:Land clearing costs $ 5,000 Sale of firewood to a worker (400) Architect fees (for new building) 30,000 Title investigation of land 3,500 Property taxes on land (for the first year) 3,000 Building construction costs 400,000Required: Determine the amounts that the company should record in the Land and the New Building accounts.
The Italian Pizza Company purchased land as a factory site for $90,000. Prior to construction of the new building, the land had to be cleared of trees and brush. Construction costs incurred during the first year are listed below:
Land clearing costs $ 5,000
Sale of firewood to a worker (400)
Architect fees (for new building) 30,000
Title investigation of land 3,500
Property taxes on land (for the first year) 3,000
Building construction costs 400,000
Required:
Determine the amounts that the company should record in the Land and the New Building accounts.
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