Q2. On the 10th of July 2023, ABC Company purchased land to construct a building to...

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Q2. On the 10th of July 2023, ABC Company purchased land to construct a building to be used as a headquarters. The purchase price of the land was 1,000,000 KD. The company paid the following costs after that on the land and the construction of the building: - - - - Attorney fees for land ownership transfer procedures 1,000 KD Purchasing commission to the real estate agent 2% of the purchasing price Ownership transfer taxes 5% of the purchasing price. Cost of landfilling and cleaning 10,000 KD Cost of demolishing and removing an old building was on the land 50,000 KD Proceeds from residual value of demolished building 15,000 KD Excavation cost for the new building 20,000 KD Architects' fees for design and supervision of the building construction 25,000 KD Payment for construction during 6-month 400,000 KD One-year insurance on construction 12,000KD Cost of parking lots and driveways 20,000 KD Cost of lightning for the parking lots and outside entrance and backyards 5,000 KD Cost of fences around the buildings and the parking lots 12,000 KD Required: 1. Calculate the cost of the land and building. 2. Journalize the required entry for the initial recognition. Q2. On the 10th of July 2023, ABC Company purchased land to construct a building to be used as a headquarters. The purchase price of the land was 1,000,000 KD. The company paid the following costs after that on the land and the construction of the building: - - - - Attorney fees for land ownership transfer procedures 1,000 KD Purchasing commission to the real estate agent 2% of the purchasing price Ownership transfer taxes 5% of the purchasing price. Cost of landfilling and cleaning 10,000 KD Cost of demolishing and removing an old building was on the land 50,000 KD Proceeds from residual value of demolished building 15,000 KD Excavation cost for the new building 20,000 KD Architects' fees for design and supervision of the building construction 25,000 KD Payment for construction during 6-month 400,000 KD One-year insurance on construction 12,000KD Cost of parking lots and driveways 20,000 KD Cost of lightning for the parking lots and outside entrance and backyards 5,000 KD Cost of fences around the buildings and the parking lots 12,000 KD Required: 1. Calculate the cost of the land and building. 2. Journalize the required entry for the initial recognition.

Answer rating: 100% (QA)

1 To calculate the cost of the land and building we need to sum up all the costs associated with the ... View the full answer