In year 2, Kilroy Company purchased land for a new office building at a purchase price of $325,000. There was an existing buildi
ng 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 year 2. In addition, the following costs were incurred: Professional Fees: Attorneys for the purchase contract $ 7,500 Engineers to determine the required grading $ 18,000 Architects to design new building $ 40,000 Building permits $ 8,000 Construction of new building $ 1,275,000 In Kilroy’s December 31, year 2, financial statements, how will the above costs be reported? Land Building Expense a. $ 341,000 $ 1,323,000 $ 0 b. $ 351,500 $ 1,315,000 $ 15,500 c. $ 359,000 $ 1,323,000 $ 0 d. $ 333,500 $ 1,275,000 $ 73,500
