1) Using the information presented above, determine the Historical Cost that should be established on Desert's Balance Sheet for the EQUIPMENT & FURNITURE

Early in 2018, Desert, Co. finalized plans to expand operations. The first stage was completed on January 19th with the purchase of a tract of land to be used as the location for their new office complex. The land and existing building were purchased for $850,000, paying cash. Title search, title insurance, back property taxes and other closing costs totaling $20,000 were paid at closing During February, the old building was demolished at a cost of $70,000, and an additional $50,000 was paid to clear and grade the land. Salvaged materials from the demolished building were sold for proceeds of $20,000. Construction of the new office complex began on March 1 and was completed on November 30, 2018. Construction expenditures paid to sub-contractors were made as follows March 1 900,000 June 1 $1,200,000 Sept 1 $1,500,000 Nov1 S1,800,000 Desert borrowed a $2,100,000, 896, 2-year note on February 1st to help finance construction. Interest will be paid annually. The company's only other outstanding debt during all of 2018 was a $3,000,000, 996, 10-year note payable In December, the company purchased equipment and furniture for a lump-sum price of $500,000. The fair values of the equipment and furniture were $455,000 and $245,000, respectively