Question $1$

Early in $2024,$ Desert, Co$.$ finalized plans to expand operations. The first stage

was completed on January $19$th 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 $$750,000,$ 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 $$10,000.$

Construction of the new office complex began on March $1$ and was

completed on November $30,2024.$ Construction expenditures paid to sub$-$

contractors were made as follows:

Desert borrowed a $$2,000,000,8\%,2-$year note on February $1$ st to help finance

construction. Interest will be paid annually. The company's only other

outstanding debt during all of $2024$ was a $$3,100,000,9\%,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.

Given this information, determine the Historical Cost of the Land.

Question $2$

Using the information presented in Question $1$ above, determine the Historical

Cost of the building after taking into consideration the capitalization of

interest.