Chapter 10, Problem 2E

To determine

Cost of Land and Building: Cost of land not only includes purchase price but also any expenditure incurred to make the land ready for use. This includes any legal fees paid; cost incurred for grading, filling, or draining the land; any expenses related to mortgage and encumbrances; and improvement made to land to make the land suitable for use.

Cost of building includes cost of construction, any interests paid on amounts due, cost of Drawings, and any liability insurances paid. In addition to these any costs incurred directly or indirectly toward the construction of the building is capitalized.

To determine the cost of the land and the cost of the building.