The Italian Bread Company purchased land as a factory site for $63,000. 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 $ 8,300 Sale of salvaged materials (1,000 ) Architect fees (for new building) 16,500 Legal fees (for title investigation of land) 2,300 Property taxes on the land (for the first year) 3,300 Building construction costs 530,000 Interest costs related to the construction 19,500 Required: 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.)
The Italian Bread Company purchased land as a factory site for $63,000. 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 $ 8,300 Sale of salvaged materials (1,000 ) Architect fees (for new building) 16,500 Legal fees (for title investigation of land) 2,300 Property taxes on the land (for the first year) 3,300 Building construction costs 530,000 Interest costs related to the construction 19,500 Required: 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Italian Bread Company purchased land as a factory site for $63,000. 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 | $ | 8,300 | |
| Sale of salvaged materials | (1,000 | ) | |
| Architect fees (for new building) | 16,500 | ||
| Legal fees (for title investigation of land) | 2,300 | ||
| Property taxes on the land (for the first year) | 3,300 | ||
| Building construction costs | 530,000 | ||
| Interest costs related to the construction | 19,500 | ||
Required:
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.)
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