Question

Company purchased a parcel of land as a factory site for $150,000. Construction began immediately on a new building. Costs incurred are as follows: Architect’s fees $25,000 Legal fees $2,000 Construction cost $250,000 Company should record the cost of the new land and building, respectively, at:__________

Answer 1

Answer:

$152,000 & $275,000.00   respectively

Explanation:

The cost of land will include legal fees;

Therefore: The cost of land is $ 150,000.00 + $ 2,000.00

  =$152,000

Cost of building: Architect’s fees +Construction cost

   =$25,000.00+$250,000.00

                                = $275,000.00