Whispering Co. purchased land as a factory site for $488,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $51,240 to raze the old buildings and sold salvaged lumber and brick for $7,686. Legal fees of $2,257 were paid for title investigation and drawing the purchase contract. Whispering paid $2,684 to an engineering firm for a land survey, and $82,960 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,830, and a liability insurance premium paid during construction was $1,098. The contractor's charge for construction was $3,342,800. The company paid the contractor in two installments: $1,464,000 at the end of 3 months and $1,878,800 upon completion. Interest costs of $207,400 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 Whispering Co. Assume that the land survey was for the building. Cost of the Land Cost of the Building $ $
Whispering Co. purchased land as a factory site for $488,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months. The company paid $51,240 to raze the old buildings and sold salvaged lumber and brick for $7,686. Legal fees of $2,257 were paid for title investigation and drawing the purchase contract. Whispering paid $2,684 to an engineering firm for a land survey, and $82,960 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,830, and a liability insurance premium paid during construction was $1,098. The contractor's charge for construction was $3,342,800. The company paid the contractor in two installments: $1,464,000 at the end of 3 months and $1,878,800 upon completion. Interest costs of $207,400 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 Whispering Co. Assume that the land survey was for the building. Cost of the Land Cost of the Building $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Intermediate Accounting 105
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Transcribed Image Text:Whispering Co. purchased land as a factory site for $488,000. The process of tearing down two old buildings on the site and
constructing the factory required 6 months.
The company paid $51,240 to raze the old buildings and sold salvaged lumber and brick for $7,686. Legal fees of $2,257 were paid for
title investigation and drawing the purchase contract. Whispering paid $2,684 to an engineering firm for a land survey, and
$82,960 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the
property cost $1,830, and a liability insurance premium paid during construction was $1,098. The contractor's charge for construction
was $3,342,800. The company paid the contractor in two installments: $1,464,000 at the end of 3 months and $1,878,800 upon
completion. Interest costs of $207,400 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 Whispering Co. Assume that the
land survey was for the building.
Cost of the Land
Cost of the Building
tA
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