Question

In 20X4, X Company purchased land for a new office building at a purchase price of $325,000. There was an existing building on the site that was demolished at a cost of $12,000. Scrap from the demolition was sold for $3,500. The building was completed during 20X4. In addition:

Answer 1

Answer:

$359,000 and $1,323,000

Explanation:

The computation of the amount reported for land and building is shown below:

For land

= Purchase price + attorneys + demolishing cost - scrap value + engineering fees

= $325,000 + $7,500 + $12,000 - $3,500 + $18,000

= $359,000

For buidling

= Architect fees + building permits + construction cost

= $40,000 + $8,000 + $1,275,000

= $1,323,000