On March 1, 2013, Beldon Corporation purchased land as a factory site for $60,000. An old building
Question:
On March 1, 2013, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2013. Costs incurred during this period are listed below:
Demolition of old building ..................$ 4,000
Architect’s fees (for new building) ............... 12,000
Legal fees for title investigation of land ............. 2,000
Property taxes on land (for period beginning March 1, 2013) .... 3,000
Construction costs ...................... 500,000
Interest on construction loan .................. 5,000
Salvaged materials resulting from the demolition of the old building were sold for $2,000.
Required:
Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson