Question

Waterway Industries purchased land as a factory site for $1330000. Waterway paid $112000 to tear down two buildings on the land. Salvage was sold for $8000. Legal fees of $5140 were paid for title investigation and making the purchase. Architect's fees were $46900. Title insurance cost $3900, and liability insurance during construction cost $4200. Excavation cost $15760. The contractor was paid $4200000. An assessment made by the city for pavement was $9700. Interest costs during construction were $251000.
a. The cost of the land that should be recorded by Wilson Co. is:_________
b. The cost of the building should be recorded by Wilson Co. is:______

Answer 1

Answer:

A. $1,487,840

B. $4,517,860

Explanation:

a. Calculation for The cost of the land that should be recorded by Wilson Co

Cost of Land=$1,330,000+$112,000-$8,000+$5,140+$39,00+$9,700

Cost of land=$1,487,840

Therefore The cost of the land that should be recorded by Wilson Co. is:$1,487,840

b. Calculation for The cost of the building should be recorded by Wilson Co

Cost of building=$46,900 + $4,200 + $15,760 + $4,200,000 + $251,000

Cost of building=$4,517,860

Therefore The cost of the building should be recorded by Wilson Co. is: $4,517,860